Kedcoplc - eqtecplc.com · Operational Highlights - Continued strong progress on the Enfield...

Kedcoplc

Annual Report and Accounts

2013

Contents -

About Us 1

Chairman’s Statement 6

Chief Executive’s Report 7

Board of Directors 11

Directors’ Report 12

Statement of the Directors’ Responsibilities 17

Corporate Governance Report 18

Independent Auditors’ Report 20

Consolidated Statement of Profit or Loss 22

Consolidated Statement of Other Comprehensive Income 23

Consolidated Statement of Financial Position 24

Consolidated Statement of Changes in Equity 25

Consolidated Statement of Cash Flows 26

Company Statement of Financial Position 28

Company Statement of Changes in Equity 29

Company Statement of Cash Flows 30

Notes to the Consolidated Financial Statements 31

Advisers and Other Information 81

About UsStrategy

Our business strategy is to identify, develop, build, own and operate

electricity and heat generation plants in the UK and Ireland. These

plants contribute to the need for sustainable energy from renewable

sources.

We possess significant knowledge of renewable energy markets, clean

technologies, fuel sources, project development, project finance, project

delivery and operation.

We are technology neutral and are focused on delivering optimal

returns for shareholders through the diversification of technology,

development and jurisdictional risks using Biomass, Wind and Solar

renewable technologies.

We aim to have a minimum of 300MW in its total pipeline within three

years. We currently has a pipeline of renewable energy projects at

various stages of operation and development totalling 157MW.

KEDCO PLC - Annual Report and Accounts 2013

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Operational Highlights -� Continued strong progress on the Enfield Project including the

appointment of MWH Global Inc (‘MWH’) as EPC provider and the

Foresight Group as the preferred funding partner.

●

� Successful energisation of the 800kw Pluckanes wind turbine project

and the export of electricity to the national grid.

●

� Increased the size of development portfolio from 70MW at the end

of 2012 to 157MW at November 2013.

●

� The handover of the Newry Biomass Advanced Gasification Plant

from final commissioning of Phase 1 and its continuing sale of electricity

to the Northern Ireland Grid.

p2

Financial Highlights – Year ended 30th June 2013

�

� Revenue in the period amounted to e2.6 million and was in line with

management expectations (FY 2012: e10.1m). Turnover in the Group relates

to the sale of equipment to complete Phase One of the Newry joint venture

project.

●

� Administrative costs increased to e2.7m (FY 2012: e1m) primarily as a

result of a loss on foreign exchange e443K versus a gain in 2012 of e392K;

impairment of freehold property in Ireland of e319K; consultancy fees of

e274K charged to a jointly controlled entity in FY 2012 and credits in FY

2012 relating to revision of accounting estimates of e250K. On a like for like

basis administrative expenses increased slightly to e1.93m from e1.87m,

which is a result of the acquisition that took place in the year.

●

� Loss for the period of e2.8m, (FY 2012 loss: e2.5m).

●

� At 30th June 2013, the Group had net debt of e4.6m (30th June 2012:

e12m).

●

� 0.4 cent loss per share from continuing operations (FY 2012: loss per share

0.6 cent).

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Share Placing / Funding � Raised approximately e1 million in equity and received £500,000 in

loans from existing and new shareholders in the financial year.

� Entered into a rolling, monthly working capital facility in August 2013

with its 26.79% shareholder Farmer Business Developments plc.

capped at e500,000.

●

� The Group announced on 20th August 2013 that its wholly owned

subsidiary, Reforce Energy Limited, had raised e215,000 in loan notes

from private investors and that Ulster Bank Ireland Limited have made

available working capital and other facilities totalling £750,000 to be

used to fund the working capital needs and the continued build out of

the Newry Biomass Limited biomass project located in Newry, Northern

Ireland.

p4

Acquisition and Restructuring� Successfully negotiated the acquisition in December 2012 of Reforce

Energy Limited, a project developer with a wind portfolio of 88MW at

various stages of development.

●

� Completed the disposal of a non-core asset being the entire interest

in Latvian subsidiary for e3m, as part of debt restructuring.

●

� Successfully negotiated balance sheet restructuring with various

lenders, resulting in the conversion of debt to equity and a reduction of

balance sheet debt.

p5


Kedco operates in energy markets in the UK and Ireland where the renewableenergy sector remains central to the plans of both Governments for theirrespective energy markets. Key policy decisions on support for renewableenergy both now and in the future continue to be favourable. Theannouncement in a joint statement by both governments in June 2013 onthe development of renewable trading between the two countries illustratesthis further. Rising fossil fuel prices and the security of energy supply remainan ongoing concern and reflect the need to develop greater energyindependence and sustainability.

The Group is a ‘technology neutral’ renewable energy business with a corefocus on developing and delivering operational electricity and heat generationprojects. The Group focuses on both medium sized and small-scale projects,providing flexibility to maximise existing land positions whilst diversifyingdevelopment and technology risks. This flexible business model will deploycapital where it can achieve the best return for shareholders whilst stillkeeping the focus on the generation of clean energy from either electricity orheat. Diversification in the business model, management experience, properstructuring of contracts at an early stage and delegation of construction andoperating risk to financially strong counterparties are all key aspects ofKedco’s risk mitigation.

During the course of the year we saw a strengthening of the businessfoundation of the Company.

We are encouraged by our progress so far this year. The Group hasperformed in line with expectations and we are successfully delivering on ourdevelopment plans. Important highlights include the handover of the NewryBiomass Advanced Gasification Plant from final commissioning of Phase 1and its continuing sale of electricity to the Northern Ireland Grid, theenergisation of the Pluckanes wind turbine and its commencement of the saleof electricity to the Irish Grid and the continuing progress of the EnfieldBiomass Gasification Plant in North London to a stage where financial closeis expected shortly.

The Directors believe that the Group is well placed to successfully deliver itsstrategic goals, underpinned by the commitment to a cleaner and more secureenergy future. On behalf of my colleagues on the board, we wish to expressour thanks to the management and staff who have continued to work sodiligently over the past year.

Dermot O’ConnellNon-Executive Chairman

Chairman’s Statement -

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Operational Review

The Group’s strategy is to develop medium to small-scale renewable energygeneration plants generally in the range of 0.5MW to 20MW. This range isconsidered to be optimal in terms of the energy market and in terms of theGroup’s business model.

The Group is operating a project development model. The Group findsproject sites, then obtains planning and environmental permissions as well asdeveloping and specifying the power project, thus generating substantialvalue. Debt and equity partners are then sought to enable the project buildout, with the Group retaining a material equity stake of at least 50% in eachproject.

The developer model enables the developer, the Group, to make substantialreturns on its initial investment on development and permitting costs. TheGroup expects to generate in excess of 3 times return on individual projectsthat typically take three years to execute.

The Group currently has 157MW of potential power at various stages ofdevelopment as set out below:

Biomass CHP Project Portfolio – 69MW

Newry Biomass 4MW CHP Project

The Company announced that the Newry Biomass CHP project had exportedelectricity to the grid in September 2012. Since then the Group, inconjunction with both Zeropoint and Clarke Energy, has undertaken standardreliability tests of the equipment before formally taking over the equipmentfrom its respective partners. The GE Jenebacher engine was commissionedby Clarke Energy on 7th September 2012 with the gasifier beingcommissioned and taken over by the Company on 4th June 2013.

Following the formal commissioning hand over, the Group has been focusedon completing various tests and reports required by Ulster Bank IrelandLimited in connection with the drawdown of debt facilities for Phase 2 of theproject for an additional 2MW.

The bank’s technical adviser, Mott McDonald, have completed their reportand submitted it to Ulster Bank for their approval. The Group is currently indiscussions with Ulster Bank regarding this report and the timing for thedrawdown of facilities for Phase 2.

Chief Executive’s Report -

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The electricity generated by the plant is being sold to BordGais Eireann under a Power Purchase Agreement (‘PPA’).The civil and on-site works for this additional 2MW havealready been completed and a deposit has been paid tosecure the expansion of the grid infrastructure for theproject. The Group has invested £5.6m through acombination of equity and loan notes in the projectcorporate entity and owns 50 per cent of the ordinary equityand 92 per cent of the economic return from the project.Our major shareholder, Farmer Business Developments plcowns the remaining 50 per cent of the ordinary equity butis only entitled to 8 per cent of the economic return fromthe project. The balance of the project funding was arrangedthrough a financing deal with RBS Ulster Bank, whichcommitted project finance facilities of up to £8m. Furtherupdates will be provided in the near future as the projectmoves towards full commissioning of the first phase.

A pre-planning consultation process regarding the 4MWPhase 3 extension to the Newry Biomass project is currentlyunderway and a formal planning application will besubmitted shortly.

12MW Enfield Biomass CHP ProjectThe Enfield Project has full Planning and EnvironmentalPermission for the conversion of 60,000 tonnes of wastetimber per annum into up to 12MW of electricity and heat.The project is expected to reach financial close and startconstruction shortly.

The Group announced recently that it has chosen MWH asits preferred construction contractor for the Enfield Projectfollowing a competitive tender process, which was runearlier this year. MWH is a leading provider of EPCconstruction services to the utilities and renewables sectors.

MWH have offered a turnkey solution for the constructionof the entire project under an engineering, procurement andconstruction (‘EPC’) contract, which will also incorporate thesupply of the gasification system. Draft EPC contracts havebeen exchanged and detailed negotiations are on-going.Fichnter Consulting Engineers continue to assist the Groupwith these negotiations and all parties are working towardsfinalising and signing the contract in the near future.

The Group also confirmed that it has chosen StatkraftMarkets GmBH (‘Statkraft’) as its preferred partner for thepurchase of 100% of the electricity generated by the plant.Heads of terms for a long term power purchase agreementhave been agreed with Statkraft and draft contracts havebeen exchanged. The Group is well advanced withdiscussions to finalise this agreement.

The Group has continued to work with a large multinational,located close to the Enfield Project, to purchase 100% of theheat generated by the Enfield Project. A detailed heat studyand pipe route layout has been completed and the Group isin advanced discussions regarding the commercial terms ofthe offtake agreement.

The grid connection agreement for the Enfield Project wassecured earlier in the year with the payment of the depositto UK Power Networks. Discussions are on-going with UKPower Networks to finalise the construction programme forthe grid connection.

The Group is continuing to negotiate heads of terms for thesupply of feedstock to the Enfield Project with a number ofsuppliers. The intention is to contract the majority of thefeedstock required on financial close for the funding of theproject.

The Group is continuing to work with the Foresight Groupregarding the financing of the project and due diligence isnearly completed. Both parties continue to work towardsreaching financial close shortly with construction to startimmediately following this.

12MW Clay Cross Biomass CHP The Group is currently engaged in the consenting processfor a 12MW site in Clay Cross in Derbyshire in cooperationwith the Larkfleet Group its co-development partner on thesite.

Chief Executive’s Report - continued

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12MW Plymouth Biomass CHPOn the 2 July 2013 the Group announced that it had signedheads of terms with the London & Devonshire Trust (“LDT”)regarding a site for a 12MW biomass CHP project inPlymouth. Both the Group and LDT remain committed tothe project and the expectation is that a legally bindingoption agreement will be signed shortly. LDT have continuedwith the development of the wider site and have secured agrid connection offer for the Biomass CHP project.

25MW Londonderry Port Biomass CHPThe Group continues to progress the Derry Port 25MWBiomass CHP project with the cooperation of theLondonderry Port and Harbour Commissioners, the ownerof the site.

Wind Portfolio – 88MW

800kw Pluckanes Windfarm ProjectThe Group announced the successful energisation of the800kw Pluckanes wind turbine project and the export ofelectricity to the national grid.

Enercon GmBH completed the installation and precommissioning of the wind turbine during September 2013.ESB Networks completed the energisation of the project on27 September 2013, which allowed the project to exportelectricity to the national grid. The project has commencedthe sale of electricity to Energia under the power purchaseagreement.

Single Wind Turbine Projects

The Group has received planning permission for fourseparate single wind turbine projects during the year beingthe Altilow, Moneygorm, Knockavadra and Killuaghprojects. An application for connection to the national gridhas been made for all of the projects. Meteorological mastshave also been installed at both the Altilow and Moneygormsites and wind data collection is on-going. Both of theseprojects are on track to be construction ready by Q1 2014.

The Group continues to focus on single wind turbine projectsin Ireland and the UK. At present the Group has five suchprojects in the planning process with decisions on a numberexpected before the end of this calendar year.

The Group intends to finance groups of small-scale projectstogether, thereby creating a small-scale wind portfolio.Pluckanes, Altilow and Moneygorm will be the first of suchportfolios into which further projects can be added.

52.5MW Wind Farm Co-DevelopmentWork on the four Windfarm projects, which form part of the52.2MW Co-Development agreement is continuing. Theenvironmental studies and initial layout has been completedon two of these projects with further ecology work requiredon the other two projects. The intention is to submitplanning applications on the first project before the end ofthe year.

Small Scale Solar

Sark Island SolarThe Group announced on the 2 July 2013 that it had enteredinto a partnership with the Trustees of the Sark IslandCommunity Centre and School regarding a 25kw roof topsolar PV project. Following a public consultation process atthe start of July 2013 the project received planning approvalon the 9th July 2013. The Group has since appointed theLarkfleet Group as its preferred installer for the project andwork is on-going to install the project in early 2014.

Small-Scale Solar Projects Two projects are already planning approved, with a plan toinstall and commission these during 2014. There are furtheropportunities for solar projects within the existing pipeline.

Project PortfolioThe Group is currently in discussion with a number of siteowners in the UK and Ireland regarding future sites for thedevelopment of renewable energy projects. The intention isto secure sites that will increase the development pipeline toa minimum 300MW within the next three years.



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Financial ReviewRevenue in the period amounted to e2.6m and was in linewith management expectations (FY2012: e10.1m).Turnover in the Group relates to the sale of equipment tocomplete Phase One of the Newry joint venture project. TheGroup reported a loss for the period of e2.8m (FY2012 loss:e2.5m).

Administrative costs increased to e2.7m (FY2012: e1m)primarily as a result of a loss on foreign exchange e443Kversus a gain in 2012 of e392K; impairment of freeholdproperty in Ireland of e319K; consultancy fees of e274Kcharged to a jointly controlled entity in FY2012 and creditsin FY2012 relating to revision of accounting estimates ofe250K. On a like for like basis administrative expensesincreased slightly to e1.93m from e1.87m, which is a resultof the acquisition which took place in the year.

At 30th June 2013, the Group had net debt of e4.6m (30thJune 2012: e12m) including cash balances of e22,150(30th June 2012: e144,764).

The financial information is prepared on a going concernbasis, as discussed in more detail in Note 3 to the financialstatements. The validity of the going concern concept isdependent upon additional finance being available for theGroup’s working capital and planned development program.In the absence of new funds being raised from newinvestors, the Group will be reliant on the financial supportof its existing shareholders and creditors to enable it tocontinue to trade.

During the period the Company raised approximately e1min equity and received £500,000 in loans from existing andnew shareholders as previously announced on 27thNovember 2012 and 28th March 2013.

The Company announced on 20th August 2013 that it hadentered into a rolling, monthly working capital facility withits 26.79% shareholder Farmer Business Developments plc.Funds drawn down under the Facility are used by theCompany to meet ongoing working capital requirements.The facility is capped at e500,000 but can be increased byagreement between the parties.

The Group announced on 20th August 2013 that its whollyowned subsidiary, Reforce Energy Limited, had raisede215,000 in loan notes from private investors and thatUlster Bank Ireland Limited have made available workingcapital and other facilities totaling £750,000 to be used tofund working capital requirements and the continued buildout of the Newry Biomass Limited biomass project located inNewry, Northern Ireland.

OutlookAgainst the positive backdrop of significant progress madewith the Group’s portfolio of development projects, theGroup will continue to develop and review its projectpipeline and focus on its funding requirements includingraising additional project debt and project equity in 2014and securing additional funds to continue with its activitiesand its planned development program.

Looking ahead, the Board is confident that the Group has anumber of key strengths, which position it to capitalise onthe opportunities in this fast paced sector.

Gerry MaddenCEO


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Kedco PLC Board of Directors -

�� Dermot O’Connell, Non-Executive ChairmanDermot O'Connell is Chairman of Cork Cooperative Marts and aformer director of Kedco's largest shareholder, Farmer BusinessDevelopments plc. He joined the Board as a Non-Executive Director inMarch 2011 and appointed as Non-Executive Chairman in October2011.

�� Gerry Madden, CEO Gerry Madden has been in the role of Chief Executive of Kedco plcsince March 2011, having previously joined the company in May 2007as Finance Director. He previously set up and operated a corporatefinance practice between 1998 and 2007, advising UK and Irishcompanies on corporate finance activities and business strategy. Duringthis period he also acted as a Non-Executive Director for companies inthe technology, healthcare, retail and renewable energy sectors. Heoriginally worked for 16 years with international accountants KPMGand was auditor and adviser to listed companies, multinationals andprivate companies operating in Ireland and internationally. He is aFellow of the Institute of Chartered Accountants in Ireland and is agraduate of University College Cork.

�� Brendan Halpin, Executive DirectorBrendan Halpin joined Kedco plc in February 2006 as FinancialController and joined the Board as Executive Director in March 2011.Brendan is a Fellow of the Institute of Chartered Accountants in Ireland,having qualified as an accountant with PricewaterhouseCoopers in1998. His current responsibilities include inter alia, financemanagement, project management and treasury functions.

�� Steve Dalton, Executive DirectorSteve was the previous CEO of Reforce Energy Limited, which wasacquired by Kedco plc in Dec 2012. Prior to setting up Reforce he spentc.7 years working for Ulster Bank, a subsidiary of the Royal Bank ofScotland plc with responsibility for energy financing in the Irish market.Throughout this time he led the financing of over 30+ projects in therenewable energy sector with a combined capacity in excess of 550MWincluding the Newry Biomass project. He is also co-founder anddirector of Mexican Renewable Energy Limited, a renewable energycompany with over 250MW’s of renewable energy projects underdevelopment in Northern Mexico.

�� Edward Barrett, Non - Executive DirectorEddie Barrett is a director of Kedco plc since 2008. He is experiencedin executing strategic initiatives in business management and assetdevelopment in the agricultural and renewable energy sectors. He hasserved as a director and consultant for a number of companies in thesesectors since 1993.


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Directors’ Report -

The Directors present their annual report and the audited financial statements of the company and its subsidiaries collectively known as‘the Group’ for the year ended 30th June 2013.

Principal ActivitiesThe principal activities of the Group are to identify, develop, build, own and operate power plants in the UK and Ireland using renewableenergy technologies. The Group focuses on both large and small scale projects, providing flexibility to maximize existing land positionswhile diversifying development and technology risks. The Group’s ultimate aim is to be one of the UK and Ireland’s largest independentrenewable energy companies, with a diverse portfolio of operating and development assets across various renewable technologies. To thisend, the Group will focus on developing its existing portfolio as well as considering strategic bolt-on acquisition opportunities that addgenerating potential to its project portfolio.

Review of Business and Future Developments and Key Performance Indicators A review of the Group’s business and future developments and key performance indicators is contained in the Chairman’s Statement andthe Chief Executive’s Report on pages 6 to 9. Below is a summary:

Operational Highlights�

�

�

�

Financial Highlights �

�

�

�

�

Share Placing / Funding �

��

�

Acquisition and Restructuring�

�

�

Continued strong progress on the Enfield Project including the appointment of MWH Global Inc (‘MWH’) as EPC provider and theForesight Group as the preferred funding partner.Successful energisation of the 800kw Pluckanes wind turbine project and the export of electricity to the national grid.Increased the size of development portfolio from 70MW at the end of 2012 to 157MW at November 2013.The handover of the Newry Biomass Advanced Gasification Plant from final commissioning of Phase 1 and its continuing sale of electricityto the Northern Ireland Grid.

Revenue in the period amounted to e2.6m and was in line with management expectations (FY2012: e10.1m). Turnover in the Grouprelates to the sale of equipment to complete Phase One of the Newry joint venture project.Administrative costs increased to e2.7m (FY2012: e1m) primarily as a result of a loss on foreign exchange e443K versus a gain in 2012of e392K; impairment of freehold property in Ireland of e319K; consultancy fees of e274K charged to a jointly controlled entity inFY2012 and credits in FY2012 relating to revision of accounting estimates of e250K. On a like for like basis administrative expensesincreased slightly to e1.93m from e1.87m, which is a result of the acquisition which took place in the year.Loss for the period of e2.8m, (FY2012 loss: e2.5m).At 30th June 2013, the Group had net debt of e4.6m (30th June 2012: e12m).0.4 cent loss per share from continuing operations (FY2012: loss per share 0.6 cent).

Raised approximately e1m in equity and received approximately £500,000 in loans from existing and new shareholders in the financialyear.Entered into a rolling, monthly working capital facility in August 2013 with its 26.79% shareholder Farmer Business Developments plc.capped at e500,000.The Group announced on 20th August 2013 that its wholly owned subsidiary, Reforce Energy Limited, had raised e215,000 in loan notesfrom private investors and that Ulster Bank Ireland Limited have made available working capital and other facilities totalling £750,000to be used to fund the working capital needs and the continued build out of the Newry Biomass Limited biomass project located in Newry,Northern Ireland.

Successfully negotiated the acquisition in December 2012 of Reforce Energy Limited, a project developer with a wind portfolio of 88MW at various stages of development.Completed the disposal of a non-core asset being the entire interest in Latvian subsidiary for e3m, as part of debt restructuring.Successfully negotiated balance sheet restructuring with various lenders, resulting in the conversion of debt to equity and a reductionof balance sheet debt.

p12

Directors’ Report - (continued)

Results and DividendsThe results for the year are set out on page 18. No dividends have been proposed by the Directors (2012: eNil).

Principal Risks and UncertaintiesThe Group has a risk management structure in place, which is designed to identify, manage and mitigate business risk. Risk assessmentand evaluation is an essential part of the Group’s internal control system.

Information about the financial risk management objectives and policies of the Group, along with exposure of the group to credit risk,liquidity risk and market risk, are disclosed in Note 4 of the notes to the consolidated financial statements.

The Group is exposed to a number of other risks and uncertainties. These break into three categories:� General risks impacting the business.� Project development related risk.� Going concern - this is discussed in Note 3 of the financial statements.

General RisksElectricity marketThe Group’s plans are exposed to electricity market price risk through variations in the wholesale price of electricity. The Group managesthis risk by entering into long term power purchase agreements.

Legislative riskThe Group is exposed to adverse changes in legislation that may impact the income for renewable energy power plants. The directorsmonitor possible changes to legislation and where possible engage in the consultation process to safeguard the Group’s interests. Projectedproject revenues could be affected by changes to the renewable legislation including for example; the number of Renewable ObligationCertificates awarded per MWh of generation under the Renewable Obligation. Any negative changes to these projected revenues couldimpact the ability of the group to secure debt and equity for projects.

LiquidityThe cash requirements of the Group are forecast by the Board annually in advance and reviewed monthly by management, enabling theGroup’s cash requirements to be anticipated. The cash forecast includes assumptions with respect to working capital, development spendand the timing of planning consents and financial close of projects. Significant delays in these expected timings may lead to a requirementfor additional cash and impinge on going concern.

Project Development RisksSite evaluation and procurementSecuring sites for the development of renewable energy power plants is a key requirement in further developing the business. This reliesupon the ability of the Group to locate, evaluate, select, develop and realise appropriate opportunities, and to be able to negotiate andcomplete land agreements and related access/connection agreements at a cost that allows profitable projects to be developed.

The Group manages these risks by continually reviewing a large number of sites in the UK and Ireland such that it is not focused on anyone particular landowner or location.

Planning and Development ConsentOnce a site is secured a planning and development consent is sought, together with any other necessary permits to allow a renewableenergy power plant to be constructed and operated. During this stage of the process the Group is exposed to the following specific risks:�

�

�

�

Consents may be subjected to delays beyond the Group’s control, which may subsequently cause the project to be delayed or aborted.There are no guarantees that any or all of the necessary consents will be granted;Consents granted may be subject to conditions that affect the economic or operational viability of the proposed project. These could inturn impact the Group’s ability to raise project finance, or reduce the value of a project in the case of a sale;Delays or onerous planning conditions may lead to unforeseen costs which the Group may need to raise finance for; andLegislative changes may influence the acceptability of the site or the economic viability of the project.


p13


Principal Risks and Uncertainties (continued)Planning and Development Consent (continued)

The Group manages these risks through securing sites on which it believes it can secure planning and development consent, employingsuitably qualified and significantly experienced staff to manage the consenting process and ensure compliance with the latest legislation,as well as ensuring maximum engagement of local authorities and interested stakeholders from a very early stage.

The Group has significant experience of securing planning consents for renewable energy power plants and knowledge of the importantcriteria involved. The Group uses this experience when selecting sites for development.

Contract NegotiationThis stage of the development process involves the negotiation of contracts for the construction of the renewable energy plant, the saleof electricity and related products produced by the plant, the procurement of fuel for the plant and the operation of the plant. This stagebegins during the early stages of the planning and development and concludes at the point of financial close. During this stage the Groupis exposed to the following specific risks in addition to those outlined above:�

�

The Group manages these risks through soliciting bids from a number of different suppliers for the equipment required to construct theplant and any other materials or equipment required to ensure the plant can operate profitably.

Financial CloseThis stage relates to the crystallisation of the project into the construction stage. This may involve either the sale of the project, in wholeor part, or securing project finance enabling the project to be constructed. During this stage the Group is exposed to the additional risks:�

�

�

�

It is the Board’s view that once the project has planning and development consent, these risks are mitigated by the potential to sell aproject for at least its book value.

The Group has experience in negotiating financial arrangements for power plants and understands the contract structures required tosecure project finance. Additionally the Group has relationships with a number of project finance banks, utility and large industrialcompanies allowing project finance or sale discussions to be initiated.

ConstructionThis stage is reached once financing, both debt and equity, is secure and all project contracts are entered into.During this stage the Group is exposed to the following specific risks:�

�

�

�

The Group seeks to mitigate these risks through the negotiation of fixed price contracts with reputable contractors and by ensuring thefinancial plans include adequate levels of contingency to accommodate cost overruns. Additionally, the Group seeks to appoint an owner’sengineer with significant experience to oversee the project programme once construction commences.

the ability to secure fixed price contracts for the construction of each power plant with the required level of guarantees that allow projectfinance to be secured; andsignificant changes to inflation impacting the costs of building and operating renewable energy power plants and therefore theprofitability of renewable energy power plants.

the general availability of finance to fund the construction of power plants, and the level of lending that can be secured;changes to interest rates which may impact the cost of financing power projects;the ability to secure equity on acceptable terms for the construction of projects once debt is in place; anddepressed market for the sale of projects, leading to low prices or no willing buyers.

cost overruns by contractors or claims made may result in a need for additional equity or debt funding;delays to the construction programme leading to higher than planned interest charges during the construction programme and may delaythe commencement of operating cash flows to fund the Group’s on-going activities;failure of the completed plant to operate as planned; andsupplier insolvency.

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Going ConcernThe directors have assessed going concern. See Note 3 for further details.

DirectorsThe present Directors are listed on page 11.

Mr William Kingston, Mr Donal O’Sullivan and Mr Diarmuid Lynch resigned as directors of the company on 19th December 2012.

Mr Diarmuid Lynch also resigned from his role as company secretary on 19th December 2012 and Mr Brendan Halpin assumed the positionfrom this date.

Mr Steve Dalton was appointed to the board on 21st December 2012 and in accordance with the Articles of Association retires and offershimself for re-election. In accordance with the Articles of Association, Mr Edward Barrett retires by rotation and being eligible offershimself for re-election.

The board recommends the re-election of Mr Steve Dalton and Mr Edward Barrett as directors.

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Directors’ and Secretary’s Interests in SharesThe Directors and Secretary of Kedco plc who held office at 30th June 2013 had the following interests in the shares of the Company:

Edward Barrett 86,194,592 3,080,000 13,571,666 3,080,000

Steve Dalton 24,146,213 - - -

Brendan Halpin 16,038,808 3,261,873 8,217,120 3,261,873

Gerard Madden 76,667 14,926,161 76,667 14,926,161

Dermot O’Connell - - - -

Remuneration Committee ReportThe Group’s policy on senior executive remuneration is designed to attract and retain people of the highest calibre who can bring theirexperience and independent views to the policy, strategic decisions and governance of the Group.

In setting remuneration levels the Remuneration Committee takes into consideration the remuneration practices of other companies ofsimilar size and scope. A key philosophy is that staff must be properly rewarded and motivated to perform in the best interests of theshareholders. Details of Directors’ remuneration are included in Note 36 of the notes to the consolidated financial statements.

Books of AccountTo ensure that proper books and accounting records are kept in accordance with Section 202 of the Companies Act, 1990, the Directorshave employed appropriately qualified accounting personnel and have maintained appropriate computerised accounting systems. Thebooks of account are located at 4600 Airport Business Park, Cork, Ireland.

Subsequent EventsDetails of events occurring since 30th June 2013 which impact on the Group are included in Note 42.

AuditorsThe auditors, Deloitte & Touche, Chartered Accountants and Statutory Audit Firm, continue in office in accordance with Section 160(2) ofthe Companies Act, 1963.

Approved by the Board on 28th November 2013.

Dermot O’Connell Gerry Madden Chairman Director

Number of Ordinary Shares

at 30th June 2013

Number of ‘A’ Ordinary Sharesat 30th June 2013

Number of Ordinary Shares

at 30th June 2012(or at date ofappointment if later)

Number of ‘A’ Ordinary Sharesat 30th June 2012

(or at date ofappointment if later)

p16

Statement of the Directors’ Responsibilities -

Irish company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the stateof affairs of the Group and of the profit or loss of the Group for that period. In preparing those financial statements, the directors arerequired to:�

�

�

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial positionof the Group and to enable them to ensure that the financial statements are prepared in accordance with International Financial ReportingStandards as adopted by the European Union and comply with Irish statute comprising the Companies Acts, 1963 to 2012. They are alsoresponsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud andother irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included onthe Group’s website. Legislation in Ireland governing the preparation and dissemination of financial statements may differ from legislationin other jurisdictions.

select suitable accounting policies for the Group and the Parent Company Financial Statements and then apply them consistently;make judgements and estimates that are reasonable and prudent; andprepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue inbusiness.


p17

Corporate Governance Report -

The Company is not subject to the Combined UK Corporate Governance Code applicable to companies with full listing on the London StockExchange. The Company does however intend, so far as is practicable and desirable, given the size and nature of the business, to followthe recommendations on corporate governance for AIM companies (the ‘QCA Guidelines’) issued by the Quoted Companies Alliance(‘QCA’).

The BoardThe board of directors of the Company is responsible to shareholders for leadership in all aspects of the business. The Board comprisesfive members. Two independent Non-Executive Directors contribute individual experience from diverse backgrounds. Three ExecutiveDirectors are responsible for the implementation of all board decisions and oversee the management of the Group on a day-to-day basis.

In accordance with the articles of association, one-third of directors retire by rotation each year. Each director must be subject to re-election at least every three years.

Role of the BoardThe Company has adopted a schedule of matters reserved for consideration by the whole board, including, for example: approval of theGroup’s long-term objectives and commercial strategy; approval of the annual operating and capital expenditure budgets of the Group (andany material changes thereto); changes relating to the Group’s structure; major changes to the Group’s corporate structure; approval ofthe Group’s annual report and accounts; approval of the dividend policy; major capital projects; changes to the structure, size andcomposition of the board; determination of the remuneration for the directors, the Company Secretary and executive management; divisionof responsibilities between the Chairman, the Chief Executive and other executives of the board; and the making of political donations orpolitical expenditure.

The Board is also responsible for ensuring maintenance of sound systems of internal control and risk management and the directors confirmthat they continually review the effectiveness of the system of internal control, covering all material controls including financial, operationaland compliance controls and risk management.

In accordance with QCA Guidelines, the board has established audit and remuneration committees, as described below, and utilises othercommittees as necessary in order to ensure effective governance.

Audit CommitteeThe Company’s Audit Committee comprises Dermot O’Connell as the Chairman and Edward Barrett. The Audit Committee meet at leasttwo times a year at appropriate times in the reporting and audit cycle and otherwise as required. The Finance Director normally attendsmeetings of the Committee and the Chief Executive Officer attends as necessary. The external auditors are invited to attend meetings ofthe Audit Committee on a regular basis.

The terms of reference for the Audit Committee include the following responsibilities:� Monitoring the integrity of the reported financial performance of the Group, including its preliminary results announcement, annual report and interim report;

� Reviewing the effectiveness of the Group’s internal financial controls;� Making recommendations to the board on the appointment and removal of the external auditors and the audit fee;� Monitoring the objectivity and independence of the external auditors.

Remuneration CommitteeThe Company’s Remuneration Committee comprises Edward Barrett as the Chairman and Dermot O’Connell. The role of the RemunerationCommittee is to review the performance of the Executive Directors and other senior executives and to set the scale and structure of theirremuneration, including the implementation of any bonus arrangements, with due regard to the interests of Ordinary Shareholders. TheRemuneration Committee also administers and establishes performance targets for share incentive schemes and determines the allocationof share incentives to employees.

Nomination CommitteeThe Company does not have a nomination committee. Any appointments to the Board are considered by the Board as a whole.

In considering the appointment of a new director, the Board identifies the characteristics, qualities, skills and experience that it believes wouldcomplement the overall balance and composition of the Board.

p18

Corporate Governance Report - (continued)

Relations with ShareholdersThe Company believes that effective communication with shareholders is of utmost importance. It has an established cycle forcommunicating trading results at the interim and year end stages and, as appropriate, of providing business updates via the RegulatoryNews Service and press releases.

The Company makes information available through regulatory announcements and its interim and annual reports. Copies of all suchcommunications can be found on the Company website www.kedco.com.

The board has adopted a code for dealings in the Company’s securities by directors and applicable employees, which conforms to therequirement of the AIM Rules (Share Dealing Code). The Company will be responsible for taking all proper and reasonable steps to ensurecompliance by the directors and applicable employees with the Share Dealing Code and the AIM Rules. The Company complies with thecorporate governance obligations applicable to Irish registered public companies whose shares are quoted on the AIM market of theLondon Stock Exchange.


p19

Independent Auditor’s Report to the members of Kedco plc -

We have audited the financial statements of Kedco Plc for the year ended 30th June 2013 which comprise the Group Financial Statements:the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, theConsolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of CashFlows, and the Parent Company Financial Statements: the Parent Company Statement of Financial Position, the Parent Company Statementof Changes in Equity, the Parent Company Statement of Cash Flows and the related notes 1 to 45. The financial reporting framework thathas been applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Unionand, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Acts, 1963 to 2012.

This report is made solely to the company's members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our auditwork has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other thanthe company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of Directors and AuditorsAs explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financialstatements giving a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance withIrish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing PracticesBoard’s Ethical Standards for Auditors.

Scope of the Audit of the Financial StatementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurancethat the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whetherthe accounting policies are appropriate to the Group’s and the parent company’s circumstances and have been consistently applied andadequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of thefinancial statements. In addition, we read all the financial and non-financial information in the annual report to identify materialinconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies weconsider the implications for our report.

Opinion on Financial StatementsIn our opinion:�

�

�

Emphasis of Matter – Going ConcernIn forming our opinion, which is not modified, we draw your attention to Note 3 to the financial statements which indicates that theGroup incurred a loss for the year of e2,835,452 and had net current liabilities of e4,979,501 at the balance sheet date. These conditionsindicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern.The directors believe progress towards securing finance has been made and have a reasonable expectation that the Group will haveadequate resources to continue in operational existence for at least one year from the date of approval of the financial statements. Thedirectors have prepared the financial statements of the Company and the Group on a going concern basis. The financial statements donot include any adjustments that would result if the Group was unable to continue as a going concern.

the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state ofthe Group’s affairs as at 30th June 2013 and of its loss for the year then ended; the parent company financial statements give a true and fair view, in accordance with IFRSs, as adopted by the European Union as appliedin accordance with the provisions of the Companies Acts, 1963 to 2012 of the state of the parent company’s affairs as at 30th June 2013;the financial statements have been properly prepared in accordance with the Companies Acts, 1963 to 2012 and, as regards the Groupfinancial statements, Article 4 of the IAS Regulation.

p20

Independent Auditor’s Report to the members of Kedco plc - continued

Matters on which we are required to report by the Companies Acts, 1963 to 2012We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

In our opinion proper books of account have been kept by the parent company.

The parent company balance sheet is in agreement with the books of account.

The net assets of the parent company, as stated in the parent company balance sheet are more than half of the amount of its called-upshare capital and, in our opinion, on that basis there did not exist at 30th June 2013 a financial situation which under Section 40 (1) of theCompanies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the parent company.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the provisions in the Companies Acts 1963 to 2012 which require us to report to you if, in ouropinion, the disclosures of directors’ remuneration and transactions specified by law are not made.

Honor MooreFor and on behalf of Deloitte & ToucheChartered Accountants and Statutory Audit FirmCork

Date: 28th November 2013

Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial statements since first published. These matters are the responsibility of the directors but no controlprocedures can provide absolute assurance in this area.

Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.p21


Consolidated Statement of Profit or Loss -for the year ended 30th June 2013

Notes 2013 2012h h

Revenue 8 2,664,088 10,083,158Cost of Sales 9 (2,662,922) (10,123,726)

Gross Profit / (Loss) 1,166 (40,568)

Operating ExpensesAdministrative Expenses 10 (2,662,980) (953,705)Other Operating Income 20,500 11,100

Operating Loss (2,641,314) (983,173)

Finance Costs 11 (353,733) (414,424)Share of profits / (losses) on Joint Ventures after Tax 23 3,811 (213,923)Finance Income 11 328 333

Loss Before Taxation 13 (2,990,908) (1,611,187)

Income Tax Expense 14 - -

Loss for the Year from Continuing Operations (2,990,908) (1,611,187)

Profit for the year from discounted operations 15 164,322 493,911Loss on disposal of subsidiary of discontinued operations 39 (8,866) -Losses arising on the remeasurement of assets held for sale 15 - (1,364,082)

Net Profit /(Loss) for the year from discontinued operations 15 155,456 (870,171)

Loss for the year - total (2,835,452) (2,481,358)

Loss Attributable To:Owners of the Owners of the Company (2,868,316) (2,580,140)Non-Controlling Interests 32,864 98,782

(2,835,452) (2,481,358)

Euro Per Share Euro Per ShareBasic and Diluted Loss Per Share:From Continuing Operations 17 (0.004) (0.006)From Continuing and Discontinued Operations 17 (0.004) (0.009)

The financial statements were approved by the Board of Directors on 28th November 2013 and signed on its behalf by:


p22

Consolidated Statement of Other Comprehensive Income -for the year ended 30th June 2013

2013 2012h h

Loss for the Financial Year (2,835,452) (2,481,358)

Other comprehensive incomeItems that will not be reclassified subsequently to profit or loss - -

Items that may be reclassified subsequently to profit or lossExchange differences arising on retranslation of foreign operations 192,788 (310,844)

192,788 (310,844)

Total comprehensive income and expense for the year (2,642,664) (2,792,202)

Attributable to:Owners of the company (2,675,528) (2,890,984)Non-controlling interests 32,864 98,782

(2,642,664) (2,792,202)

p23


Consolidated Statement of Financial Position -As at 30th June 2013

Notes 2013 2012ASSETS h h

Non-Current AssetsGoodwill 18 2,249,200 -Intangible assets 19 - -Property, plant and equipment 20 1,638,352 757,329Share of net assets in joint ventures 23 187,068 -Financial assets 21 6,233,268 7,608,687Total Non-Current Assets 10,307,888 8,366,016

Current AssetsInventories 24 - 50,000Amounts due from customers under construction contracts 25 293,637 1,355,212Trade and other receivables 26 2,219,305 1,605,518Cash and cash equivalents 36 22,150 144,764

2,535,092 3,155,494Assets classified as held for sale 16 - 6,584,239Total Current Assets 2,535,092 9,739,733

TOTAL ASSETS 12,842,980 18,105,749

EQUITY and LIABILITIESEquityShare capital 27 12,176,200 4,106,808Share premium 27 19,090,865 19,375,525Shared based payment reserves 28 - -Deferred consideration 38 600,000 -Retained earnings – deficit (27,883,201) (25,207,673)Equity /(deficit) attributable to equity holders of the parent 3,983,864 (1,725,340)Non-controlling interests - 898,010Total Equity /(Deficit) 3,983,864 (827,330)

Non-Current LiabilitiesBorrowings 29 1,344,523 2,525,025Finance lease liabilities 30 - -Share of net liabilities of jointly controlled entities 23 - 509,599Deferred tax liability 32 - -Total Non-Current Liabilities 1,344,523 3,034,624

Current LiabilitiesAmounts due to customers under construction contracts 25 1,019,307 1,110,090Trade and other payables 31 3,228,557 2,495,766Borrowings 29 3,266,729 9,661,645Finance lease liabilities 30 - 373

7,514,593 13,267,874Liabilities associated with assets held for sale 16 - 2,630,581Total Current Liabilities 7,514,593 15,898,455

TOTAL EQUITY and LIABILITIES 12,842,980 18,105,749



p24

Consolidated Statement of Changes in Equity -for the year ended 30th June 2013

Balance at 1st July 2011

Issue of ordinary shares in Kedco plc

Share issue costs

Loss for the financial year

Unrealised foreign exchange loss

Credit arising on not meetingnon-market based vesting conditions

Balance at 30th June 2012

Issue of ordinary shares in Kedco plc

Conversion of debt into equity

Issue of ordinary shares and contingentequity consideration on acquisition of subsidiary

Share issue costs

Loss for the financial year

Unrealised foreign exchange gain

Disposal on non-controlling interestin subsidiary (Note 39)

Balance at 30th June 2013

ShareCapital

e

3,543,999

562,809

-

-

-

-

4,106,808

951,296

5,724,229

1,393,867

-

-

-

-

12,176,200

SharePremium

e

19,038,300

378,701

(41,476)

-

-

-

19,375,525

4,959

44,046

6,133

(339,798)

-

-

-

19,090,865

RetainedEarnings

e

(22,316,689)

-

-

(2,580,140)

(310,844)

-

(25,207,673)

-

-

-

-

(2,868,316)

192,788

-

(27,883,201)

DeferredConsider-

ation

e

-

-

-

-

-

-

-

-

-

600,000

-

-

-

-

600,000

Share-basedpaymentreserve

e

492,580

-

-

-

-

(492,580)

-

-

-

-

-

-

-

-

-

Attributableto equityholders ofthe parent

e

758,190

941,510

(41,476)

(2,580,140)

(310,844)

(492,580)

(1,725,340)

956,255

5,768,275

2,000,000

(339,798)

(2,868,316)

192,788

-

3,983,864

Non -Controllinginterests

e

799,228

-

-

98,782

-

-

898,010

-

-

-

-

32,864

-

(930,874)

-

Total

ee

1,557,418

941,510

(41,476)

(2,481,358)

(310,844)

(492,580)

(827,330)

956,255

5,768,275

2,000,000

(339,798)

(2,835,452)

192,788

(930,874)

3,983,864

p25


Consolidated Statement of Cash Flows -for the year ended 30th June 2013

Notes 2013 2012Cash Flows from Operating Activities h h

Loss for the financial year (2,835,452) (2,481,358)Adjustments for:Income tax - 69,731Credit arising on not meeting non-market based vesting conditions - (492,580)Depreciation of property, plant and equipment 272,156 596,418Amortisation of intangible assets - 2,275Profit on disposal of property, plant and equipment (83,537) (67,236)Impairment of property, plant and equipment 318,750 -Impairment of assets held for sale - 1,364,082Impairment of amounts due from customers under construction contracts 102,657 -Allowance against amounts due in unpaid share capital - 492,563Unrealised foreign exchange movements 624,810 163,677Share of (profits) /losses of jointly controlled entities after tax (3,811) 213,923Decrease in allowance for impairment of trade receivables - (71,924)(Decrease) / Increase in impairment of inventories (177,571) (294,715)Decrease in deferred income (4,293) (10,302)Interest expense 411,620 506,754Loss on disposal of share in subsidiary undertaking 8,866 -Interest income (328) (338)

Operating cash flows before working capital changes (1,366,133) (9,030)Decrease/(Increase) in:Amounts due from customers under construction contracts 1,223,650 8,070,067Trade and other receivables (1,303,384) 4,336Inventories 656,403 276,377

(Decrease)/increase in:Amounts due to customers under construction contracts (90,783) (162,645)Trade and other payables 502,514 (2,476,219)

Cash (Used in) / from Operations (377,733) 5,702,886Income taxes paid - (9,108)Net Cash (Used in) / from Operating Activities (377,733) 5,693,778

Cash Flows from Investing ActivitiesAdditions to property, plant and equipment (872,222) (644,737)Proceeds from sale of property, plant and equipment 109,585 126,951Additions to intangible assets - (1,770)Additions to investments in jointly controlled entities - (6,660,010)Net cash inflow from acquisition of subsidiaries 38 156,781 -Net cash inflow from disposal of subsidiaries 39 226,094 -Interest received 328 338Net Cash Used in Investing Activities (379,434) (7,179,228)

p26

Consolidated Statement of Cash Flows (continued)

for the year ended 30th June 2013Notes 2013 2012

h h

Cash Flows from Financing ActivitiesProceeds from borrowings 719,101 2,896,483Repayments of borrowings (248,555) (2,293,628)Proceeds from issuance of ordinary shares 956,255 685,726Share issue costs (221,115) (41,476)Payments of finance leases (31,424) (58,496)Interest paid (217,222) (255,842)Net Cash from Financing Activities 957,040 932,767

Net Increase / (Decrease) in Cash and Cash Equivalents 199,873 (552,683)Cash and cash equivalents at the beginning of the financial year (344,096) 208,587Cash and cash equivalents at the end of the financial year 36 (144,223) (344,096)

p27


Company Statement of Financial PositionAs at 30th June 2013

Notes 2013 2012h h

ASSETSNon-Current AssetsIntangible Assets 19 - -Investment in Subsidiary Undertakings 21 2,000,003 24,941,463Total Non-Current Assets 2,000,003 24,941,463

Current AssetsTrade and other receivables 26 11,904,568 18,336,014Cash and bank balances 36 20,654 14,331Total Current Assets 11,925,222 18,350,345

TOTAL ASSETS 13,925,225 43,291,808

EQUITY and LIABILITIESEquityShare Capital 27 12,176,200 4,106,808Share Premium 27 38,024,944 38,309,604Share based payment reserve 28 - -Deferred consideration 38 600,000 -Retained earnings - deficit 44 (38,287,015) (11,835,887)

Equity attributable to equity holders of the parent 12,514,129 30,580,525

Non-Current LiabilitiesBorrowings 29 599,523 -

Current LiabilitiesBorrowings 29 5 6,680,402Trade and other payables 31 811,568 6,030,881Total Current Liabilities 811,573 12,711,283

TOTAL EQUITY and LIABILITIES 13,925,225 43,291,808



p28

Company Statement of Changes in Equity -for the Year Ended 30th June 2013

Share Share Retained Share-Based Deferred TotalCapital Premium Earnings Payment Consideration

Reserveh h h h h h

Balance at 1st July 2011 3,543,999 37,972,379 (11,550,529) 492,580 - 30,458,429

Issue of ordinary sharesin Kedco plc 562,809 378,701 - - - 941,510

Share issue costs - (41,476) - - - (41,476)

Loss for the financial year - - (285,358) - - (285,358)

Credit arising on not meeting non-market based vesting conditions - - - (492,580) - (492,580)

Balance at 30th June 2012 4,106,808 38,309,604 (11,835,887) - - 30,580,525

Issue of ordinary sharesin Kedco plc 951,296 4,959 - - - 956,255

Conversion of debt into equity 5,724,229 44,046 - - - 5,768,275

Issue of ordinary shares and contingent equity considerationon acquisition of subsidiary 1,393,867 6,133 - - 600,000 2,000,000

Share issue costs - (339,798) - - - (339,798)

Loss for the financial year - - (26,451,128) - - (26,451,128)

Balance at 30th June 2013 12,176,200 38,024,944 (38,287,015) - 600,000 12,514,129

p29


Company Statement of Cash Flows -for the Year Ended 30th June 2013

Notes 2013 2012

u u

Cash Flows from Operating ActivitiesLoss before taxation (26,451,128) (285,358)Adjustments for:Credit arising from not meeting non-market based vesting conditions - (492,580)Interest expense 133,547 160,926Interest income - (333)Provision for impairment of investment in subsidiaries 24,941,460 -Amortisation of intangible assets - 1,770Foreign currency losses arising from retranslation of borrowings 42,624 430,401

Operating cash flows before working capital changes (1,333,497) (185,174)

Decrease /(increase) in:Trade and other receivables 5,445,970 (7,485,824)

(Decrease) / increase in:Trade and other payables (5,422,344) 5,551,138

Cash used in operations (1,309,871) (2,119,860)Income taxes paid - (695)

Net Cash Used in Operating Activities (1,309,871) (2,120,555)

Cash Flows from Investing ActivitiesAdditions to intangible assets - (1,770)Interest received - 333

Net Cash (used in) / from Investing Activities - (1,437)

Cash Flows from Financing ActivitiesProceeds from borrowings 581,049 1,200,000Repayments of borrowings - (95,979)Proceeds from issuance of ordinary shares 956,255 685,726Share issue costs (221,115) (41,476)Interest paid - (14,666)

Net Cash from Financing Activities 1,316,189 1,733,605

Net (Decrease) / Increase in Cash and Cash Equivalents 6,318 (388,387)

Cash and cash equivalents at the beginning of the Financial Year 14,331 402,718

Cash and Cash Equivalents at the end of the Financial Year 36 20,649 14,331

p30

Notes to the Consolidated Financial Statements -for the Year Ended 30th June 2013

General InformationKedco plc (‘the Company’) was incorporated in Ireland on 2nd October 2008. The address of its registered office and principal place ofbusiness is Building 4600, Cork Airport Business Park, Kinsale Road, Cork.

On 13th October 2008 the Group, previously headed by Kedco Block Holdings Limited, underwent a re-organisation by virtue of whichKedco Block Holdings Limited’s shareholders, in their entirety, exchanged their shares for shares in Kedco plc, a newly-formed company.Kedco plc then became the ultimate parent company of the Group.

These financial statements for the year ended 30th June 2013 consolidate the individual financial statements of the Company and itssubsidiaries (together referred to as ‘the Group’).

On 20th October 2008 the Company’s shares were admitted to trading on the London Stock Exchange’s AIM market.

The principal activity of the Group is to identify, develop, build, own and operate renewable energy electricity and heat generating powerplants in the UK and Ireland. The Group focuses on both large and small scale projects, providing flexibility to maximise existing landpositions while diversifying development and technology risks.

Application of New and Revised International Financial Reporting Standards (IFRSs)The following new and revised Standards and Interpretations have been adopted by the Group with no significant impact on its consolidatedresults or financial position, but may impact the accounting for future transactions or arrangements:

Amendments to IAS 1 Presentation of Financial Statements revise the way other comprehensive income is presented. The amendmentsintroduce new terminology, whose use is not mandatory, for the statement of comprehensive income and income statement. Under theseamendments, the ‘Statement of comprehensive income’ is renamed as the ‘Statement of profit or loss and other comprehensive income’,and the ‘Income statement’ is renamed as the ‘Statement of profit or loss’. The amendments retain the option to present profit or lossand other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendmentsto IAS 1 require items of other comprehensive income to be grouped in two categories in the other comprehensive income statement: a)Items that will not be reclassified subsequently to profit or loss; and b) Items that may be reclassified subsequently to profit or loss whenspecific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis – theamendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendmentshave been applied retrospectively and hence the presentation of items of other comprehensive income has been modified to reflect thechanges. Other than the above mentioned presentation changes, the application of the amendments to IAS 1 does not result in anyimpact on profit or loss, other comprehensive income and total comprehensive income.

Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets provides a presumption that recovery of the carrying amount of anasset measured using the fair value method in IAS 40 Investment Property will, normally, be through sale. As a result, SIC 21 Income Tax– Recovery of Revalued Non-Depreciable Assets would no longer apply to investment properties carried at fair value.

The following new and revised Standards and Interpretations have not been adopted by the Group, whether endorsed by the EuropeanUnion or not. The Group is currently analysing the practical consequences of the new Standards and the effects of applying them to thefinancial statements. The related standards and interpretations are:

�

�

�

�

�

�

IFRS 9 Financial Instruments and subsequent amendments (effective for annual periods beginning on or after 1st January 2015, not yetendorsed by the European Union);

IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on or after 1st January 2014; endorsed by theEuropean Union on 11th December 2012).

IFRS 11 Joint Arrangements (effective for annual periods beginning on or after 1st January 2014; endorsed by the European Union on11th December 2012).

IFRS 12 Disclosure of Interest in Other Entities (effective for annual periods beginning on or after 1st January 2014; endorsed by theEuropean Union on 11th December 2012).

IFRS 13 Fair Value Measurement (effective for annual periods beginning on or after 1st January 2014; endorsed by the European Unionon 11th December 2012).

IAS 27 Separate Financial Statements (Amended 2011) (effective for annual periods beginning on or after 1st January 2014; endorsedby the European Union on 11th December 2012).

1

2

p31


Notes to the Consolidated Financial Statements - (continued)for the Year Ended 30th June 2013

Application of New and Revised International Financial Reporting Standards (IFRSs) -(continued)�

�

�

�

�

�

�

�

�

�

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Statement of Accounting Policies Basis of Preparation and Going ConcernThe Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)effective at 30th June 2013 for all periods presented as issued by the International Accounting Standards Board. The consolidated financialstatements are also prepared in accordance with IFRS as adopted by the European Union (‘EU’).

The consolidated financial statements are prepared under the historical cost convention except for certain financial assets and financial liabilitieswhich are measured at fair value. The principal accounting policies set out below have been applied consistently by the parent Company andby all of the Company’s subsidiaries to all periods presented in these consolidated financial statements.

The financial statements of the parent company, Kedco plc have been prepared in accordance with International Financial Reporting Standards(IFRS) effective at 30th June 2013 for all periods presented as issued by the International Accounting Standards Board and Irish Statutecomprising the Companies Acts 1963 to 2012.

The Group continues to invest capital in developing and expanding its portfolio of renewable energy projects. The nature of the Group’sdevelopment programme means that the timing of funds generated from developments is difficult to predict. Management have preparedfinancial forecasts to estimate the likely cash requirements of the Group over the next twelve months. The forecasts include certain assumptionswith regard to the costs of ongoing development projects, overheads and the timing and amount of any funds generated from developments.The forecasts indicate that the Group will require additional funds to continue with its activities and its planned development program.

Whilst the strategy is to build, own and operate plants, once a site has been secured and planning and permitting obtained the Group wouldbe in a position, if it so chose, to monetise the value of the project.

Additional funds can be secured either through an equity fundraise, the issuance of further loan notes, monetisation of project assets, or acombination of all three options.

IAS 28 Investments in Associates and Joint Ventures (Amended 2011) (effective for annual periods beginning on or after 1st January2014; endorsed by the European Union on 11th December 2012).

Amendments to IFRS 1 First Time Adoption of International Financial Reporting Standards (effective for annual periods beginningon or after 1st January 2013; endorsed by the European Union on 11th December 2012).

Amendments to IFRS 7 Financial Instruments: Disclosures (effective for annual periods beginning on or after 1st January 2013;endorsed by the European Union on 13th December 2012).

Amendments to IAS 32 Financial Instruments: Presentation (effective for annual periods beginning on or after 1st January 2014;endorsed by the European Union on 13th December 2012).

Annual improvements to IFRSs 2009-2011 Cycle (effective for annual periods beginning on or after 1st January 2013; endorsed bythe European Union on 27th March 2013).

Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transition Guidance (effectivefor annual periods beginning on or after 1st January 2013; endorsed by the European Union on 4th April 2013).

Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities (effective for annual periods beginning on or after 1st January 2014;not yet endorsed by the European Union).

Amendments to IAS 19 Employee Benefits (effective for annual periods beginning on or after 1st January 2013; endorsed by theEuropean Union 5th June 2012).

Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (effective for annual periods beginning on or after1st January 2014; not yet endorsed by the European Union).

Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting (effective for annual periods beginning onor after 1st January 2014; not yet endorsed by the European Union).

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective for annual periods beginning on or after 1st January2013; endorsed by the European Union on 11th December 2012).

IFRIC 21 Levies (effective for annual periods beginning on or after 1st January 2014; not yet endorsed by the European Union).

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Statement of Accounting Policies (continued)Basis of Preparation and Going Concern (continued)

The group incurred a loss of e2,835,452 (2012: e2,481,358) during the year, and it had net current liabilities of e4,979,501 (2012:e6,158,722) and net assets of e3,983,864 (2012: net liabilities e827,330) at 30th June 2013.

In the year to 30th June 2013, the Company raised approximately e1m in equity and received £500,000 in loans from existing andnew shareholders. The Company announced in August 2013 that it had entered into a rolling, monthly working capital facility with its26.79% shareholder Farmer Business Developments plc. Funds drawn down under the Facility are used by the Company to meet on-going working capital requirements. The facility is capped at e500,000 but can be increased by agreement between the parties.

The Group announced in August 2013 that its wholly owned subsidiary, Reforce Energy Limited, had raised e215,000 in loan notesfrom private investors. The proceeds from the loan notes will be used to fund development costs and equity related to single windturbine projects. The Group also announced that Ulster Bank Ireland Limited have made available working capital and other facilitiestotalling £750,000 to be used to fund the working capital needs and the continued build out of the Newry Biomass Limited biomassproject located in Newry, Northern Ireland.

The financial statements have been prepared on a going concern basis. The Directors have given careful consideration to theappropriateness of the going concern basis in the preparation of the financial statements. The validity of the going concern basis isdependent upon finance being available for the Group’s working capital requirements and for the continued investment in the Group’sstrategy of identifying, developing, building and operating power generating plants so that the Group can continue to realise its assetsand discharge its liabilities in the normal course of business.

After making enquiries and considering the matters referred to above, the Directors believe that progress towards securing finance hasbeen made. The Directors have a reasonable expectation that the Group will have adequate resources to continue in operationalexistence for the foreseeable future. For these reasons the Directors continue to adopt the going concern basis of accounting inpreparing the financial statements. The financial statements do not include any adjustments that would result if the Group was unableto continue as a going concern.

Basis of ConsolidationThe consolidated financial statements incorporate the financial information of the Company and its subsidiaries. The financial year-endsof all entities in the Group are coterminous.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control over theoperating and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out of theGroup. Control exists where the Company has the power, directly or indirectly, to govern the financial and operating policies of theentity so as to obtain economic benefits from its activities.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with thoseused by other members of the Group.

The results and assets and liabilities of subsidiaries are incorporated in these financial statements, except when the subsidiary is classifiedas held for sale, in which case it is accounted for in accordance with IFRS 5 Non – Current Assets Held for Sale and DiscontinuedOperations.

On 13th October 2008 the Group, previously headed by Kedco Block Holdings Limited, underwent a re-organisation by virtue ofwhich Kedco Block Holdings Limited’s shareholders, in their entirety, exchanged their shares for shares in Kedco plc, a newly formedCompany. Kedco plc then became the ultimate parent company of the Group. Notwithstanding the change in the legal parent of theGroup, this transaction was accounted for as a reverse acquisition under IFRS 3 Business Combinations and these consolidated financialstatements are prepared on the basis of the new legal parent, Kedco plc, having been acquired by the existing Group. As a result ofapplying reverse acquisition accounting, the consolidated financial statements are a continuation of the financial statements of KedcoBlock Holdings Limited and its subsidiaries.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group’sequity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination andthe non-controlling share of changes in equity since the date of the combination. Losses applicable to the non-controlling interest inexcess of its interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the non-controlling interest has a binding obligation and is able to make an additional investment to cover the losses.

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Statement of Accounting Policies (continued)Business CombinationAcquisitions of subsidiaries and businesses from third parties are accounted for using the purchase method. The cost of the businesscombination is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed,and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the businesscombination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3Business Combinations, are recognised at their fair values at the acquisition date, except for non-current assets that are classified asheld for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised andmeasured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the businesscombination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If,after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilitiesexceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of non-controlling shareholders in the acquiree is measured at the non-controlling interest’s proportion of the net fairvalue of the assets, liabilities and contingent liabilities recognised.

GoodwillFor the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from thesynergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or morefrequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less thanthe carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to theunit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

An impairment loss for goodwill is immediately recognised in profit or loss and not reversed in a subsequent year.

On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of theprofit or loss on disposal.

Interests in Jointly Controlled EntitiesJoint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred toas jointly controlled entities. The Group reports its interests in jointly controlled entities using the equity method of accounting exceptwhen the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-Current Assets Heldfor Sale and Discontinued Operations. Under the equity method, investments in jointly controlled entities are carried in the consolidatedbalance sheet at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the jointly controlled entity, lessany impairment in the value of individual investments. Losses of jointly controlled entities in excess of the Group’s interest in that jointlycontrolled entity (which includes any long-term interests that, in substance, form part of the Group’s net investment in the jointlycontrolled entities) are recognised only to the extent that the Group has incurred legal or constructive obligations or made paymentson behalf of the jointly controlled entity.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingentliabilities of the jointly controlled entity recognised at the date of acquisition is recognised as goodwill. The goodwill is included withinthe carrying amount of the investment and is assessed for impairment as part of that investment.

Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost ofacquisition, after reassessment, is recognised immediately in profit or loss.

Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent of the Group’sinterest in the joint venture.

InvestmentsInvestments in subsidiary undertakings are accounted for at cost less provisions for diminution in value.

Revenue RecognitionRevenue is measured at fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns,rebates and other similar allowances.

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Statement of Accounting Policies (continued)Rendering of servicesThe Group recognises revenue from a contract to provide services by reference to the stages of completion of the contract. The stages ofcompletion of the contract are determined as follows:�

�

�

The Group’s policy for recognition of revenue from construction contracts is described below.

Interest RevenueInterest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which isthe rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carryingamount.

LeasingThe Group as LesseeLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to thelessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value, or if lower, at the present value of the minimumlease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet asa finance obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve aconstant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. In the event that lease incentives arereceived to enter into operating leases, such incentives are recognised as a liability. The benefit of incentives is recognised as a reductionof rental expense on a straight-line basis over the lease term.

Foreign CurrenciesFor the purposes of the consolidated financial statements, the results and financial position of each group entity are expressed in Euro, whichis the functional currency of the Company and its subsidiaries, except for Kedco Fabrication Limited and Enfield Biomass Limited, wherethe functional currency is Sterling.

Transactions in currencies other than the functional currencies are recorded at the rates of exchange prevailing at the dates of thetransactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at thebalance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the ratesprevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreigncurrency are not retranslated.

For the purpose of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are expressedin Euro using exchange rates prevailing at the balance sheet date. Income and expense items are translated at the rates at the dates ofthe transactions. For practical reasons, in some cases a rate that approximates the exchange rates at the dates of the transactions is usedif exchange rates do not fluctuate significantly.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreignoperation and translated at the closing rate.

Borrowing CostsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarilytake a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as theassets are substantially ready for their intended use or resale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deductedfrom the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the year in which they are incurred.

Installation fees are recognised by reference to the stage of completion of the installation, determined as the proportion of the total timeexpected to install that has elapsed at the end of the reporting period;Servicing fees included in the price of products are recognised by reference to the proportion of the total cost of providing the servicingfor the product sold;Revenue from time and material contracts is recognised at the contractual rates as labour hours and direct expenses are incurred.

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Statement of Accounting Policies (continued)Government GrantsGovernment grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to themand that the grants will be received.

Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets arerecognised as deferred income in the balance sheet within either non-current liabilities or current liabilities, as appropriate and transferredto profit or loss on a systematic and rational basis over the useful lives of the related assets and included in the line item ‘administrativeexpenses’ as an offset against depreciation of the relevant asset.

Other government grants are recognised as income over the periods necessary to match them with the costs for which they are intendedto compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred orfor the purposes of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the yearin which they become receivable.

TaxationIncome tax expense represents the sum of the tax currently payable and deferred tax.

Current TaxThe tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated incomestatement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items thatare never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantivelyenacted at the balance sheet date.

Deferred TaxDeferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and thecorresponding tax bases used in the computation of taxable profit and are accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductibletemporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initialrecognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit northe accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probablethat sufficient taxable profits will be available to allow all or part of the asset to be recovered.

A deferred tax liability is recognised for all taxable temporary differences associated with investments in subsidiaries except where theCompany controls the timing of the reversal of the temporary difference and where the temporary difference will not reverse in theforeseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled orthe asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Themeasurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Groupexpects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities,when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilitieson a net basis.

Current and Deferred Tax for the Financial YearCurrent and deferred tax are recognised as an expense or income in profit or loss, except where they relate to items credited or debiteddirectly in equity.

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Statement of Accounting Policies (continued)Share-Based PaymentsThe Group operates an equity settled share-based long-term incentive plan (the ‘LTIP’). Group share schemes allow employees to acquireshares in the Company. The fair value of the share entitlements is recognised as an employee expense in the income statement with acorresponding increase in equity. Share entitlement granted by the Company under the LTIP are subject to non-market vesting conditions.Non-market vesting conditions are not taken into account when estimating the fair value of entitlements as at the grant date.

The expense for the share entitlements shown in the income statement is based on the fair value of the total number of entitlementsexpected to vest and is allocated to accounting periods on a straight-line basis over the vesting period. The cumulative charge to theincome statement is reversed only where entitlements do not vest because non-market performance conditions have been met or wherean employee in receipt of share entitlements leaves the Group before the end of the vesting period.

Property, Plant and EquipmentProperty, plant and equipment are stated in the balance sheet at cost, less accumulated depreciation and any accumulated impairmentlosses. The cost of plant, property and equipment and construction in progress comprises purchase price and other directly attributable costs.

Freehold land and construction in progress are not depreciated.

Depreciation is charged so as to write off the cost of assets, other than freehold land and construction in progress, over their estimateduseful lives to estimated residual value, using the straight line method. The estimated useful lives, residual values and depreciation methodare reviewed at each year end. The following estimated useful lives are used in the calculation of depreciation:

� Buildings 5 - 50 years� Plant and Machinery 2 - 5 years� Office Equipment 2 - 5 years� Fixtures and Fittings 2 - 5 years� Motor Vehicles 5 years

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, theterm of the relevant lease.

The gain or loss on disposal or retirement of an item of property, plant and equipment is determined as the difference between the salesproceeds and the carrying amount of the asset and is recognised in profit or loss.

Held for SaleNon-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transactionrather than through continuing use.

This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale inits present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completedsale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at thelower of the assets’ carrying amount and fair value less costs to sell. Where the criteria are no longer met the non-current asset or disposalgroup is reclassified to the appropriate balance sheet heading and is measured at the lower of its recoverable amount at the date of thedecision not to sell and its carrying amount before being reclassified as held for sale, adjusted for any depreciation, amortisation orrevaluation that would have been recognised had the asset not been classified as held for sale.

Intangible AssetsInternally-generated Intangible Assets – Research and Development ExpenditureExpenditure on research activities is recognised as an expense in the year in which it is incurred.

Intangible assets arising from development are only recognised if the Group has the necessary technical, financial and other resources tocomplete the development, the asset has the ability to generate future cash flows and other economic benefits for the Group and the Groupcan measure the expenditure attributable to the intangible asset.

The amount initially recognised for internally-generated intangible assets is the amount of the expenditure incurred from the date whenthe intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised,development expenditure is charged to profit or loss in the year in which it is incurred.

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Statement of Accounting Policies (continued)Internally-generated Intangible Assets – Research and Development Expenditure (continued)Subsequent to initial recognition, internally-generated assets are reported at cost less accumulated amortisation and accumulatedimpairment losses. Amortisation is charged on a straight line basis over their estimated useful lives. The estimated useful life andamortisation method are reviewed at the end of each annual reporting year.

The following useful lives are used in the calculation of amortisation of intangible assets:

� Website 2 years� Software 3 years� Trademarks 4 years� Development costs 5 years

Impairment of Tangible and Intangible Assets Excluding GoodwillAt each balance sheet date, the Group reviews the carrying amount of its tangible and intangible assets to determine whether there is anyindication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimatedin order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash generating units for which a reasonable and consistent allocation basis canbe identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and wheneverthere is an indication that the assets may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flowsare discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money andthe risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount ofthe asset (or cash-generating unit) is reduced to its recoverable amount.

InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined on an average cost basis and includes all expenditureincurred in the normal course of business in bringing the products to their present location and condition. Net realisable value representsthe estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Construction ContractsWhere the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage ofcompletion of the contract activity at the balance sheet date, measured based on the proportion of contract costs incurred for workperformed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion.Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costsincurred that it is probable will be recoverable. Contract costs are recognised as expenses in the year in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Trade and Other ReceivablesTrade and other receivables are initially recognised at fair value plus transaction cost. Impairment is recognised for trade receivables wherethere is objective evidence that the Group will not be able to collect amounts due according to the original terms of the receivable indicatedby a default in payment terms and significant financial difficulty.

Cash and Cash EquivalentsCash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to knownamounts of cash with maturities of three months or less from the date of acquisition and that are subject to an insignificant risk of changein value.

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Statement of Accounting Policies (continued)Financial Liabilities and Equity Instruments Issued by the Group MeasurementFinancial liabilities are initially measured at fair value net of transaction costs.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense overthe relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and pointspaid or received that forms an integral part of the effective interest rate, transaction costs and other premiums or discounts) through theexpected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Classification as Debt or EquityDebt and equity instruments are classified as either financial liabilities or as an equity instrument in accordance with the substance of thecontractual arrangement and the definitions of a financial liability and an equity instrument.

Equity InstrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equityinstruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

A financial instrument is classified as an equity instrument if, and only if, the instrument includes a contractual obligation to deliver cashor other financial assets to another entity and if the instrument will or may be settled in the issuer’s own equity instruments, it is a non-derivative with no contractual obligation to deliver a variable number of its own equity instruments or a derivative that will be settled bythe issuers exchanging a fixed amount of cash or another financial asset for a fixed number of its own equity instruments.

Financial instruments which do not meet the recognition criteria of equity instruments are classified as financial liabilities.

Financial LiabilitiesFinancial liabilities are classified as either financial liabilities at fair value through profit or loss (‘at FVTPL’) or other financial liabilities.

Financial Liabilities at FVTPLFinancial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:�

�

�

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:�

�

�

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Thenet gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains or losses’line item in the consolidated income statement.

Other Financial LiabilitiesOther financial liabilities (including borrowings) are subsequently measured at amortised cost using the effective interest method.

Derecognition of Financial Liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. Thedifference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised inprofit or loss.

It has been acquired principally for the purpose of repurchasing it in the near term; orOn initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actualpattern of short-term profit-taking; orIt is a derivative that is not designated and effective as a hedging instrument.

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; orThe financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance isevaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and informationabout the grouping is provided internally on that basis; orIt forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition andMeasurement permits the entire combined contract (asset and liability) to be designated as at FVTPL.

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Critical Accounting Judgements and Key Sources of Estimation of UncertaintyIn the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about thecarrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions arebased on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in theyear in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affectsboth current and future years.

The following are the critical judgments, apart from those involving estimations, that management have made in the process of applyingthe entity’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

Going ConcernAs described in the basis of preparation and going concern in Note 3 above, the validity of the going concern concept is dependent uponfinance being available for the Group’s working capital requirements and for the continued investment in the Group’s strategy of identifying,developing, building and operating power generating plants so that the Group can continue to realise its assets and discharge its liabilitiesin the normal course of business. After making enquiries and considering the matters referred to above, the Directors believe that solidprogress towards securing finance has been and is being made. The Directors have a reasonable expectation that the Group will haveadequate resources to continue in operational existence for the foreseeable future.

Recoverability of Amounts Due Under Construction ContractsThe directors considered the recoverability of the Group’s balances due under construction contracts which is included in the balance sheetat 30th June 2013 at e293,637 (2012: e1,355,212). The directors have reviewed the relevant costs incurred to date and expected costsfor completion. They have also been in contact with the ultimate beneficiaries of the construction contracts and have considered theability of these customers to have the relevant facilities available to pay for these contracts. Based on these reviews, the directors aresatisfied with the recoverability of balances due under construction contracts at the balance sheet date.

Allowances for Impairment of Trade Receivables The Group estimates the allowance for doubtful trade receivables based on assessment of specific accounts where the Group has objectiveevidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their financialobligations. In these cases, judgment used was based on the best available facts and circumstances including but not limited to, thelength of relationship. At 30th June 2013, provisions for doubtful debts amounted to €Nil which represents 0% of trade receivables at thatdate (2012: eNil – 0%).

Of the trade receivables outstanding at 30th June 2013 of e1,959,737; e1,959,228 is due from Newry Biomass Limited (‘Newry’), ajointly controlled entity of the group, to Kedco Fabrication Limited, a subsidiary of the group and the EPC contractor for the Newry project.Newry has banking facilities available from Ulster Bank Ireland Limited. The GE Jenebacher engine was commissioned by Clarke Energyon 7th September 2012 with the gasifier commissioned and taken over by Newry on 4th June 2013.

Following the formal commissioning hand over Kedco Fabrication Limited has been focused on completing various tests and reportsrequired by Ulster Bank Ireland Limited in connection with the drawdown of debt facilities for Phase 2 of the project. The banks technicaladviser, Mott McDonald, have completed their report and submitted it to Ulster Bank for their approval. Newry is currently in discussionswith Ulster Bank regarding this report and the timing for the drawdown of facilities for Phase 2, which will facilitate the payment of theabove trade receivable.

Impairment of GoodwillDetermining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill hasbeen allocated. The value in use calculation requires the directors to estimate the future cash flows to arise from the cash-generating unitand a suitable discount rate in order to calculate present value. Where the actual cash flows are less than expected, a material impairmentmay arise. The carrying amount of the goodwill at 30th June 2013 was e2,249,200 (2012: eNil) after an impairment loss of eNil wasrecognised in 2013 (2012: eNil). Details of the review of goodwill are set out in Note 18.

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Critical Accounting Judgements and Key Sources of Estimation of Uncertainty (continued)

Provision for impairment of financial assetsDetermining whether the carrying value of financial assets has been impaired requires an estimation of the value in use of the investmentin subsidiaries and joint venture vehicles. The value in use calculation requires the directors to estimate the future cash flows expected toarrive from these vehicles and a suitable discount rate in order to calculate present value. After reviewing these calculations, the directorsare satisfied that an impairment of e24,941,460 should be recognised in the company accounts of Kedco plc. Details of this impairmentare set out in Note 21.

Determining useful lives of property, plant and equipmentThe annual depreciation charge depends primarily on the estimated lives of each type of asset and, in certain circumstances, estimates offair values and residual values. The Directors annually review these asset lives and adjust them as necessary to reflect current thinking onremaining lives in light of technological change, prospective economic utilisation and physical condition of the assets concerned. Changesin asset lives can have significant impact on depreciation charges for the period. It is not practical to quantify the impact of changes inasset lives on an overall basis, as asset lives are individually determined, and there are a significant number of asset lives in use. Details ofuseful lives are included in the accounting policy in Note 3 above. The impact of any change would vary significantly depending on theindividual changes in assets and the classes of assets impacted.

Financial Risk ManagementFinancial Risk Management Objectives and PoliciesThe Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and interest rate risk.

The Group’s financial risk management programme aims to manage the Group’s exposure to the aforementioned risks in order to minimisethe potential adverse effects on the financial performance of the Group. The Group seeks to minimise the effects of these risks bymonitoring the working capital position, cash flows and interest rate exposure of the Group. There is close involvement by members ofthe Board of Directors in the day-to-day running of the business.

One of the Group’s former subsidiaries operated in Latvia and the fluctuations in the Latvian Lat compared to the Euro have not beensignificant for the financial periods presented. Another subsidiary’s reporting currency is Sterling and the fluctuation in Sterling comparedto Euro has not been significant for the financial periods presented. The Group’s exposure to price risk is not a significant risk as thecompany does not currently hold a portfolio of securities which may be materially impacted by a decline in market values.

Credit RiskThe Group’s maximum exposure to credit risk is represented by the balance sheet amount of each financial asset:

2013 2012e e

Amounts due from customers under construction contracts 293,637 1,355,212Trade and other receivables 2,219,305 1,605,518Cash and cash equivalents 22,150 144,764

The Group’s credit risk is primarily attributable to its amounts due from customers under construction contracts and to its trade and otherreceivables.

The amounts due from customers under construction contracts represents the total costs incurred to date on the Group’s projects lessrecognised losses to date. These customers are jointly controlled entities in which the Group is a 50% partner. The directors of the Groupare in constant contact with the other partners of the jointly controlled entities. The Group’s exposure to credit risk arises from the failureof the ultimate customer to raise the appropriate finance, with a maximum exposure equal to the carrying amount of the related costs.

The Group has adopted procedures in extending credit terms to customers and in monitoring its credit risk. The Group’s exposure to creditrisk arises from defaulting customers, with a maximum exposure equal to the carrying amount of the related receivables. Provisions aremade for impairment of trade receivables when there is default of payment terms and significant financial difficulty. On-going creditevaluation is performed on the financial condition of accounts receivable at operating unit level at least on a monthly basis.

Apart from Newry Biomass Limited, the largest customer of the Group (see below and refer to Notes 3, 4 and 26), the Group does nothave significant risk exposure to any single counterparty. Concentration of credit risk relating to Newry Biomass Limited did not exceed25% of gross monetary assets at any time during the year. Concentration of credit risk to any other counterparty did not exceed 5% ofgross monetary assets at any time during the financial year. The Group defines counterparties as having similar characteristics if they arerelated parties.

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Financial Risk Management (continued)Credit Risk (continued)Exposure to credit risk on cash deposits and liquid funds is monitored by Directors. Cash held on deposit is with financial institutionsin the Ba rating category of Moody’s. The directors are of the opinion that the likelihood of default by a counter party leading tomaterial loss is minimal.

Liquidity RiskThe Group’s liquidity is managed by ensuring that sufficient facilities are available for the Group’s operations from diverse fundingsources. The Group uses cash flow forecasts to regularly monitor the funding requirements of the Group. The Group’s operations arefunded by cash generated from financing activities, borrowings from banks and investors and proceeds from the issuance of ordinaryshare capital.

The table below details the maturity of the Group’s liabilities as at 30th June 2013:

Up to 1 Year 1 – 5 Years After 5 Years Totala a a a

Trade and Other Payables 3,228,557 - - 3,228,557Amounts Due to Customers under Construction Contracts 1,019,307 - - 1,019,307Investor Loans - 599,523 - 599,523Preference Shares - 640,000 - 640,000BES Shares - 105,000 - 105,000Bank Overdrafts 166,373 - - 166,373Bank Loans 3,100,356 - - 3,100,356

7,514,593 1,344,523 - 8,859,116

The table below details the maturity of the Group’s liabilities as at 30th June 2012:

Up to 1 Year 1 – 5 Years After 5 Years Totala a a a

Trade and Other Payables 2,495,766 - - 2,495,766Amounts Due to Customers under Construction Contracts 1,110,090 - - 1,110,090 Liabilities associated with assets held for sale 2,630,581 - - 2,630,581Investor Loans 3,311,191 - - 3,311,191Vudlande Loan 1,050,000 - - 1,050,000Zero Coupon Loan Notes 3,956,621 - - 3,956,621Preference Shares - 600,000 - 600,000Bank Overdrafts 150,000 - - 150,000Bank Loans 1,193,833 - 1,925,025 3,118,858Finance Leases 373 - - 373

15,898,455 600,000 1,925,025 18,423,480

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Financial Risk Management (continued)Liquidity Risk (continued)

The Group expects to meet its obligations from operating cash flows and from access to additional funds, secured through equity fundraise,the issuance of further loan notes and monetisation of project assets. Details of loan notes and other finance raised post year end areoutlined in Note 42 to the financial statements.

Future interest payments on borrowings which are repayable after more than one year are at carrying rates as follows:

Amount Interest RateInvestor Loans 599,523 10%Preference Shares 640,000 8%

The future finance charges on finance leases are disclosed in Note 30 to the financial statements.

Interest Rate RiskThe primary source of the Group’s interest rate risk relates to bank loans and other debt instruments. The interest rates on these assetsand liabilities are disclosed above.

Bank loans and other debt instruments amounted to a4,611,252 and a12,186,670 in 2013 and 2012 respectively.

The interest rate risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings. The Group doesnot engage in hedging activities. Bank loans and certain debt instruments are arranged at floating rates which are mainly based uponEURIBOR and the prime lending rate of financial institutions thus exposing the Group to cash flow interest rate risk. The other remainingdebt instruments were arranged at fixed interest rates and expose the Group to a fixed cash outflow.

These bank loans and debt instruments are mostly medium-term to long-term in nature. Interest rates on loans received from investorsand shareholders are fixed in some cases while others are a fixed percentage greater than current prime lending rates. ‘Medium-term’refers to bank loans and debt instruments repayable between 2 and 5 years and ‘long-term’ to bank loans repayable after more than 5years.

The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the end ofthe reporting period. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability outstanding at the endof the year was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internallyto key management personnel and represents management’s assessment of the reasonably possible changes in interest rates.

If interest rates have been 50 basis points higher / lower and all other variables were held constant, the Group’s loss for the year ended30th June 2013 would decrease/increase by a16,334 (2012: decrease / increase by a16,344). This is mainly attributable to the Group’sexposure to interest rates on its variable rate borrowings.

The Group’s sensitivity to interest rates has remained constant during the current year mainly due to the consistency in value of variablerate debt instruments.

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Financial Risk Management (continued)Foreign Exchange RiskThe Group is exposed to future changes in the Sterling relative to the Euro. It was previously exposed to future changes in Latvian Lats upto the date of disposal of its Latvian subsidiary, SIA Vudlande. These risks are managed by monthly review of Sterling and previouslyLatvian Lats denominated monetary assets and monetary liabilities and assessment of the potential exchange rate fluctuation exposure.The Group’s exposure to foreign exchange risk is not actively managed. Management will reassess their strategy to foreign exchange riskin the future.

The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reportingperiod are as follows:

Liabilities Assets2013 2012 2013 2012

e e e e

Sterling 2,210,837 4,824,901 7,877,297 8,519,149Latvian Lats - 1,848,783 - 1,968,803

The group is mainly exposed to Sterling.

The following table details the Group’s sensitivity to a 10% increase and decrease in the Euro against Sterling. 10% is the sensitivity rateused when reporting foreign currency risk internally to key management personnel and represents management’s assessment of thereasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominatedmonetary items and adjusts their translation at the year-end for a 10% change in foreign currency rates. The sensitivity analysis includesexternal loans as well as loans to foreign operations within the Group where the denomination of the loan is in the currency other thanthe currency of the lender or the borrower. A positive number below indicates an increase in profit and other equity where the Eurostrengthens 10% against Sterling. For a 10% weakening of the Euro against Sterling, there would be a comparable impact on the lossand other equity, and the balances below will be negative.

Sterling Impact2013 2012

e e

Profit or Loss 699,282 463,318

The Group’s sensitivity to foreign currency has increased during the current year mainly due to the decrease in investor loans denominatedin sterling.

Market RiskThe Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates, which aredetailed above. There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures therisk.

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Capital ManagementThe Group manages its capital to ensure that the Group is able to continue as a going concern while maximising the return to shareholdersthrough the optimisation of the debt and equity balance.

The capital structure of the company consists of financial liabilities, cash and cash equivalents and equity attributable to the equity holdersof the parent company.

The Group’s management reviews the capital structure on a periodic basis. As part of the review, management considers the cost of capitaland risks associated with it. The Group’s overall strategy on capital risk management is to continue to improve the ratio of debt to equity.

The gearing ratio of the Group for the year presented is as follows:30th June 2013 30th June 2012

s s

Debt 4,611,252 12,186,670Cash and Bank Balances (22,150) (144,764)Finance Leases - 373Net Debt 4,589,102 12,042,279

Equity 3,983,864 (1,725,340)

Net Debt to Equity Ratio 115% (698%)

Debt is defined as financial liabilities and borrowings of the Group while equity includes all capital, reserves and retained earnings attributableto equity holders of the parent.

The improvement in the net debt to equity ratio is as a result of the restructuring process that took place during the financial year, whichinvolved the disposal of the Latvian subsidiary undertaking, SIA Vudlande, and the conversion of investor loans into equity.

Segment InformationInformation reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performancefocuses on the products sold to customers. The Group’s reportable segments under IFRS 8 Operating Segments are as follows:

Power Generation: Being the development and operation of renewable energy electricity and heat generating plants; andRenewable Energy Solutions: Being the supply of combined heat and power units, domestic boilers, solar panels and other related products.The Group is no longer acting in this segment.

The chief operating decision maker is the Chief Executive.

Information regarding the Group’s reportable segments is presented below.

The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment:

Segment Revenue Segment Profit / (Loss)2013 2012 2013 2012

q q q w

Power Generation 2,663,824 10,036,547 (1,271,165) (106,404)Renewable Energy Solutions 264 46,611 (437,026) (145,779)

Total from continuing operations 2,664,088 10,083,158 (1,708,191) (252,183)

Central administration costs and directors’ salaries (953,623) (742,090)Other operating income 20,500 11,100Share of profits / (losses) on joint ventures 3,811 (213,923)Interest costs (353,733) (414,424)Interest income 328 333Loss Before Taxation (continuing operations) (2,990,908) (1,611,187)

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Segment Information (continued)Revenue reported above represents revenue generated from jointly controlled entities and external customers. Inter-segment sales for theyear amounted to eNil (2012: eNil). Included in revenues in the Power Generation Segment are revenues of e2,663,824.(2012:e10,031,773) which arose from sales to Newry Biomass Limited, a company which is under the joint control of Kedco plc. No other singlecustomer contributed 10% or more to the Group’s Revenue for both 2013 and 2012.

Revenues from external customers for each product and service have not been disclosed, as the necessary information is not available, andthe cost to develop it would be excessive.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3. Segment profitor loss represents the profit or loss earned by each segment without allocation of central administration costs and directors’ salaries, otheroperating income, share of profit or loss of jointly controlled entities, profit on disposal of jointly controlled entities, interest costs, interestincome and income tax expense. This is the measure reported to the chief operating decision maker for the purpose of resource allocationand assessment of segment performance.

Other segment information:

Depreciation and Amortisation Additions to Non-Current Assets2013 2012 2013 2012

e e e e

Power Generation 15,123 14,795 725,625 6,299Renewable energy solutions 15,624 15,625 - -

30,747 30,420 725,625 6,299

In addition to the depreciation and amortisation reported above, impairment losses of e318,750 (2012: eNil) were recognised in respectof property, plant and equipment. These impairment losses were attributable as follows: Renewable Energy Solutions Segment, e318,750(2012:eNil); Power Generation Segment, eNil (2012: eNil).

The Group operates in two principal geographical areas: Republic of Ireland (country of domicile), and the United Kingdom. The Group’srevenue from continuing operations from external customers and information about its non-current assets* by geographical location aredetailed below:

Revenue from Non-Current Assets*Jointly Controlled Entities and External Customers

2013 2012 2013 2012ee ee ee ee

Republic of Ireland 264 51,385 623,345 757,329United Kingdom 2,663,824 10,031,773 1,015,007 -

2,664,088 10,083,158 1,638,352 757,329

* Non-current assets excluding goodwill, financial instruments and investment in jointly controlled entities.

The management information provided to the chief operating decision maker does not include an analysis by reportable segment of assetsand liabilities and accordingly no analysis by reportable segment of total assets or total liabilities is disclosed.

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RevenueAn analysis of the Group’s revenue for the year (excluding interest revenue), from continuing operations, is as follows:

2013 2012h h

Revenue from construction contracts 2,663,824 10,036,547Revenue from sale of goods 264 46,611

2,664,088 10,083,158

Cost of Sales 2013 2012h h

Opening Inventory 50,000 142,894Purchases 2,612,922 9,968,170Provision for Impairment of Inventory to Net Realisable Value - 60,237Freight - 2,425Closing Inventory - (50,000)

2,662,922 10,123,726

Administrative Expenses 2013 2012h h

Employee Expenses 1,053,047 515,920Recharge Consultancy Fee - (274,012)Office Expenses 164,446 164,984Marketing Expenses 857 2,456Professional Fees 267,681 373,141Depreciation and Impairment of Property, Plant and Equipment 349,497 30,420Profit on disposal of property, plant and equipment - (13,072)Amortisation and Impairment of Intangible Assets - 1,770Travel and Subsistence 101,217 (10,898)Allowance against balances due on unpaid share capital re LTIP (Note 34) - 492,563Other receivables written off 125,987 20,220Bad Debt Expense (644) 30,384Allowance for Impairment of Trade Receivables - (25,750)Other Miscellaneous Expenses 6,467 19,495Loss / (Gain) on Foreign Exchange 442,530 (391,816)Expenses capitalised (8,105) -Regulatory Expenses 160,000 17,900

2,662,980 953,705

Finance Costs and Income 2013 2012

Finance Costs h h

Interest on loans, bank facilities and overdraft 313,710 374,247Interest on preference shares 40,000 40,000Lease interest charges 23 177

353,733 414,424

Finance IncomeInterest on deposit accounts 328 333

8

9

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Employee Data 2013 2012

Employee Costs (including Executive Directors): h h

Salaries 865,040 792,278Social Insurance Costs 93,625 82,924Credit arising on not meeting non-market based vesting conditions (Note 34) - (492,580)

958,665 382,622

No. No. Average Number of Employees (including Executive Directors) 10 9

CompanyAll group employees are employed in subsidiary companies.

Loss Before Taxation 2013 2012

Loss before taxation is stated after charging /(crediting): v v

Depreciation of Property, Plant and Equipment 30,747 30,420Loss / (gain) on Foreign Exchange 442,530 (391,816)Amortisation of Intangible Assets - 1,770Directors’ Remuneration: for Services as Directors (Note 35) 39,000 67,000Directors’ Remuneration: for Other Services (Note 35) 392,500 325,000Other Redundancy Costs - 2,784Impairment Losses of Property, Plant and Equipmentcharged to Profit and Loss 318,750 - Profit on Disposal of Property, Plant and Equipment - (13,072)Provision for Impairment of Trade Receivables - (25,750)Provision for Impairment of Inventory to Net Realisable Value - 60,237

Auditor’s RemunerationAudit of Group Companies 65,000 38,700Other Assurance Services - -Tax Advisory Services 15,000 13,400Other Non-Audit Services - -

80,000 52,100

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Income Taxes Relating to Continuing Operations 2013 2012

j j

Income Tax Expense Comprises:Current Tax - -Deferred Tax - -

Income Tax Expense Recognised in Profit or Loss - -

2013 2012j j

Loss before taxation (2,990,908) (1,611,187)

Applicable Tax 12.5% (2012: 12.5%) (373,864) (201,398)

Effects of:Amortisation and depreciation in excess of capital allowances (101) (7,990)Lease payments - (581)Expenses not deductible for tax purposes 112,185 75,826Non-taxable income (16,451) (12,860)Other Timing Differences - (18,072)Income taxed at higher rate - 3,589Losses carried forward 278,231 161,486

- -

The tax rate used for 2013 and 2012 reconciliation above is the corporate rate of 12.5% payable by corporate entities in Ireland ontaxable profits under tax law in that jurisdiction.

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Discontinued OperationsDDiissppoossaall ooff SSIIAA VVuuddllaannddee ((WWoooodd PPrroodduuccttss BBuussiinneessss))In its interim results for the six months to 31st December 2011, the Group announced that it was seeking purchasers for its 80%interest in its Latvian wood processing facility, SIA Vudlande, as it was deemed non-core to the Group’s focus on the conversion ofbiomass to renewable energy. The company sought purchasers for its interest in SIA Vudlande over a considerable period. The highestoffer received for the Group’s interest as a result of this process was d2.5m. On 10th September 2012, the Group announced aproposed restructuring of the debts of the Group. As part of the restructuring, the Group had agreed in principle to allow the holdersof Zero-Coupon Secured Notes in the company to acquire the entire share capital of Kedco Block Limited for dd3m (£2,379,253), theproceeds of which will correspondingly reduce amounts due to the holders of the Zero-Coupon Secured Notes. Kedco Block Limitedis the registered shareholder of the Group’s 80% shareholding in SIA Vudlande. This proposal was approved by shareholders at anExtraordinary General Meeting held on 5th October 2012 and the disposal was completed on 27th November 2012, on which datecontrol of Kedco Block Limited and SIA Vudlande passed to the acquirer. Details of the assets and liabilities disposed of, and thecalculation of the profit or loss on disposal, are disclosed in Note 39.

The results of the discontinued wood products operations included in the consolidated income statement are set out below. Thecomparative profit and cash flows from discontinued operations have been represented to include those operations classified asdiscontinued in the current year.

PPrrooffiitt //((LLoossss)) ffoorr tthhee yyeeaarr ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss2013 2012

dd dd

Revenues 4,554,862 9,456,422Other Gains - 5

4,554,862 9,456,427Expenses (4,390,540) (8,892,785)Profit before tax 164,322 563,642Attributable income tax expense - (69,731)Profit for the year from discontinued operations 164,322 493,911Loss on disposal of operation (see Note 39) (8,866) -Loss on remeasurement to fair value less costs to sell of assets held for sale - (1,364,082)

Net profit / (loss) for the year from discontinued operations 155,456 (870,171)

Attributable to the owners of the Company 122,592 (968,953)

CCaasshh fflloowwss ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss2013 2012

dd dd

Net cash inflows from operating activities 508,956 643,548Net cash outflows used in investing activities (37,013) (524,555)Net cash outflows used in financing activities (180,938) (365,555)Net cash inflows / (outflows) 291,005 (246,562)

The wood products business has been classified and accounted for at 30th June 2012 as a disposal group held for sale (see Note 16).

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Assets Classified as Held For Sale2013 2012

ee ee

Assets related to the wood products business - 6,584,239

Liabilities associated with assets held for sale - 2,630,581

As described in Note 15 above and in Note 39, the Group completed the disposal of the wood products business being the entireinterest in its Latvian subsidiary for e3m, as part of a debt restructuring in the current year.

The major classes of assets and liabilities of the wood products business at the end of the reporting period are as follows:

2013 2012ee ee

Property, plant and equipment - 3,782,884Inventories - 1,581,364Trade and other receivables - 1,091,711Cash and bank balances - 128,280

Assets of wood products operations classified as held for sale - 6,584,239

Trade and other payables - (512,482)Current borrowings - (687,937)Current finance lease liabilities - (74,014)Current deferred income - (10,302)Non-current borrowings - (804,487)Non-current finance lease liabilities - (177,811)Non-current deferred income - (25,755)Non-current deferred tax liability - (337,793)

Liabilities of wood products operations associated with - (2,630,581)assets classified as held for sale

Net assets of wood products operations classified as held for sale - 3,953,658

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Loss Per Share 2013 2012

Euro per share Euro per shareBasic and Diluted Loss Per ShareFrom continuing operations (0.004) (0.006)From discontinued operations - (0.003)Total basic and diluted loss per share (0.004) (0.009)

The loss and weighted average number of ordinary shares used in the calculation of the basic and diluted loss per share are as follows:

2013 2012d d

Loss for year attributable to equity holders of the parent (2,868,316) (2,580,140)Profit /(loss) for the year from discontinued operations used in the calculation of basic earnings / (loss) per share from discontinued operations 122,592 (968,953)Losses used in the calculation of basic loss per share from continuing operations (2,990,908) (1,611,187)

Weighted average number of ordinary shares forthe purposes of basic loss per share 767,965,770 274,612,376

Anti-Dilutive Potential Ordinary SharesThe following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary sharesfor the purposes of diluted loss per share:

2013 2012Number Number

‘A’ Shares in issue 99,117,952 99,117,952

Ordinary shares to be issued as part of the purchase of Reforce Energy Limited on the satisfaction of certain conditions 2,489,048 -

Share warrants in issue 54,149,107 27,392,915

Convertible preference shares in issue 3,125,000 3,125,000

Convertible loans in issue 6,583,363 21,942,154

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Goodwill 2013 2012d d

Cost 2,249,200 -Accumulated impairment losses - -

2,249,200 -

2013 2012d d

CostBalance at beginning of year - 549,451Reclassified as held for resale - (549,451)Additional amounts recognised from business combinations occurring during the year (Note 38) 2,249,200 -Balance at end of year 2,249,200 -

Accumulated impairment lossesBalance at beginning and at end of year - -

Cash-Generating UnitsGoodwill acquired in business combinations is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefitfrom that business combination. A CGU is the smallest identifiable group of assets that generate cash inflows that are largely independentof the cash inflows from other assets or group of assets. The CGUs represent the lowest level within the Group at which the associatedgoodwill is assessed for internal management purposes and are not larger than the operating segments determined in accordance with IFRS8 Operating Segments. A total of two CGUs (2012: Nil) have been identified and these are all associated with the Power GenerationSegment. The carrying value of the goodwill within the Power Generation Segment is d2,249,200 (2012: dNil).

In accordance with IAS 36 Impairment of Assets, the CGUs to which significant amounts of goodwill have been allocated are as follows:

2013 2012d d

Enfield Biomass 438,083 -Reforce Energy 1,811,117 -

2,249,200 -

For the purpose of impairment testing, the discount rates applied to these CGUs to which significant amounts of goodwill have beenallocated were 12% (2012: N/a) for the Reforce Energy CGU and 15% (2012: N/a) for the Enfield Biomass CGU.

Annual Test for ImpairmentThe Group tests goodwill annually for impairment in accordance with IAS 36 Impairment of Assets, or more frequently if there is indicationthat the goodwill might be impaired.

The recoverable amount of the cash-generating units have been determined based on a value-in-use calculation which uses cash flowprojections based on financial budgets approved by the Board of Directors covering the next five year period. Cash flows after Year 5 areassumed to continue in perpetuity as a rate of 2.5% reflecting inflation.

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Goodwill (continued)

The key assumptions used in the value-in use calculations for the above cash-generating units are:

(A) Budgeted sales price: �

�

(B) Operational costs price inflation: Forecast consumer price indices during the budget period for Ireland and the UK. The values assignedto the key assumption are consistent with external sources of information.

The directors believe that any reasonably possible change in key assumptions on which the value-in-use is based would not cause theaggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit. A 1% increase in the discount ratewould not result in an impairment charge for the years presented.

No impairment losses have arisen in the current financial year, and the impairment testing carried out on goodwill at 30th June 2013identified significant headroom in the recoverable amount of the related cash generating units as compared to their carrying value.

Reforce Energy: The budgeted sales prices are based on the Renewable Energy Feed in Tariff (‘REFIT’) scheme published by theDepartment of Communications, Energy and Natural Resources in Ireland. This scheme guarantees a floor price for the production ofelectricity through wind energy in Ireland and has been applied to the value in use calculated on the Reforce Energy CGU.

Enfield Biomass: The budgeted sales prices are based on the average market terms for a typical Power Purchase Agreement (PPA),which includes payments for Renewable Obligation Certificates (ROCs), wholesale electricity prices, climate change Levy ExemptionCertificates (LECs) and embedded benefits. ROCs and LECs have a guaranteed floor price for the production of electricity throughrenewable sources in the UK and have been applied to the value in use calculated on the Enfield Biomass CGU.

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19 Intangible Assets Website Trademarks Software Development TotalCosts

GroupCost e e e e e

At 1st July 2011 - 1,128 11,025 412,349 424,502Additions 1,770 - - - 1,770Reclassified as held for sale - - (11,025) - (11,025)

At 30th June 2012 1,770 1,128 - 412,349 415,247Acquisitions throughbusiness combinations - - - 114,343 114,343Reclassified to property, plantand equipment (See Note 20) - - - (114,343) (114,343)At 30th June 2013 1,770 1,128 - 412,349 415,247

Accumulated AmortisationAt 1st July 2011 - 1,128 10,520 412,349 423,997Amortisation Expense 1,770 - - - 1,770Reclassified as held for sale - - (10,520) - (10,520)At 30th June 2012 andat 30th June 2013 1,770 1,128 - 412,349 415,247

Carrying AmountAt 30th June 2012 andat 30th June 2013 - - - - -

Development expenditure, substantially all of which was incurred in 2006, in respect of anaerobic digestion, gasification and biomassheating technologies has been recognised as an intangible asset. The expenditure incurred related to engineering costs, surveys andconsultants fees. These costs are associated with technologically feasible processes which will be used in the business in future andaccordingly have been capitalised. These costs have been fully amortised as at 30th June 2013.

All other research costs incurred during the year presented relate to other research activities and do not represent capitalisable developmentcosts. Amortisation expense has been included in the line item ‘administrative expenses’.

The reclassification to construction in progress noted above reflects assets purchased as part of the purchase of Reforce Energy Limited (seeNote 38), which was reclassified as construction in progress to be in line with Kedco plc’s policies.

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Intangible Assets (continued) Website Total

Company d d

CostAt 1st July 2012 - -Additions 1,770 1,770

At 30th June 2012 and at 30th June 2013 1,770 1,770

Accumulated AmortisationAt 1st July 2012 - -Amortisation expense 1,770 1,770

At 30th June 2012 and at 30th June 2013 1,770 1,770

Carrying AmountAt 30th June 2012 and at 30th June 2013 - -

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Property, Plant and Equipment

Land and Office Plant and Construction Fixtures and Motor TotalBuildings Equipment Machinery In Progress Fittings Vehicles

f f f f f f f

CostAt 1st July 2011 3,173,960 160,076 5,271,339 101,294 190,299 93,804 8,990,772Additions - 6,299 - - - - 6,299Disposals - (38,178) (87,697) - (150,484) (93,804) (370,163)Reclassified asheld for sale (1,513,917) - (5,183,642) (101,294) (39,815) - (6,838,668)At 30th June 2012 1,660,043 128,197 - - - - 1,788,240

Additions - 235 - 725,390 - - 725,625Acquisitions throughbusiness combinations - - - 430,839 - - 430,839Disposals - (667) - - - - (667)Reclassification fromintangible assets (Note 19) - - - 114,343 - - 114,343Foreign currencyadjustment - - - (40,287) - - (40,287)

At 30th June 2013 1,660,043 127,765 - 1,230,285 - - 3,018,093

Accumulated DepreciationAt 1st July 2011 1,434,144 128,625 2,096,017 - 177,939 93,804 3,930,529On Disposals - (38,178) (87,696) - (150,483) (93,804) (370,161)Reclassified as held for sale (524,100) - (2,008,321) - (27,456) - (2,559,877)Charge for the Year 15,625 14,795 - - - - 30,420

At 30th June 2012 925,669 105,242 - - - - 1,030,911

On Disposals - (667) - - - - (667)Impairment 318,750 - - - - - 318,750Charge for the Year 15,624 15,123 - - - - 30,747

At 30th June 2013 1,260,043 119,698 - - - - 1,379,741

Carrying AmountAt 30th June 2012 734,374 22,955 - - - - 757,329

At 30th June 2013 400,000 8,067 - 1,230,285 - - 1,638,352

Impairment Losses Recognised in the Current YearThe Group carried out a review of the recoverable amount of property held by the Renewable Energy Solutions operating segmentat 30th June 2013, as a result of falls in the property market in Ireland. The review led to recognition of an impairment loss off318,750, which has been recognised in profit or loss. The recoverable amount of the assets has been determined on the basisof their fair value, less costs to sell.

The impairment losses have been included in the line item ‘Administrative Expenses’ in the consolidated income statement.

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Financial AssetsGroup 2013 2012Loan Advanced to Jointly Controlled Entities f f

At 1st July 7,608,687 990,000Additions in year - 6,618,687Eliminated on consolidation (See note below) (990,000) -Foreign currency exchange movement (385,419) -

At 30th June 6,233,268 7,608,687

During the year ended 30th June 2012, Newry Biomass Limited, a joint venture vehicle which was established to develop a biomasselectricity and heat generating plant in Newry, Northern Ireland, issued loan notes to the Group of £5,330,691. These loan notes will beredeemed in full on 1st November 2026, and entitle the holder to a share of the earnings after tax of Newry Biomass Limited in the ratioof the loan notes issued to the relevant loan note holders.

During the year ended 30th June 2013, Kedco Investment Co. 2 Limited, a subsidiary undertaking of Kedco plc, acquired the remaining50% shareholding of Enfield Biomass Limited (see Note 38), which previously operated as a joint venture vehicle of the Group to developa biomass electricity and heat generating plant in Enfield, London. As a result of the acquisition, the loan notes issued by Enfield BiomassLimited to the Group have been eliminated on consolidation.

Company 2013 2012Investment in subsidiary undertakings f f

At 1st July 24,941,463 24,941,463Provision for impairment of investment in subsidiaries (24,941,460) -Additions (See Note 38) 2,000,000 -

At 30th June 2,000,003 24,941,463

The opening investment in subsidiary undertakings has been calculated by reference to the number of shares issued by Kedco plc in theshare for share exchange with Kedco Block Holdings Limited, multiplied by the share price on the day of the Company’s admission to theAIM, less provision for impairment. During the year, the Company purchased Reforce Energy Limited and subsidiaries. Details of thisacquisition are set out in Note 38.

During the year, the Directors reviewed the carrying value of Kedco Block Holdings Limited and its subsidiaries (Kedco Energy Limited,Granig Trading Limited, Kedco Power Limited, Castle Home Supplies Limited, Kedco Group Holdings USA Inc and Ardstown InvestmentsLimited). The directors noted that these companies are now dormant and no longer trading. Based on this, the directors believed that itwas prudent to write down the cost of the investment in Kedco Block Holdings Limited to fNil. The future cash flows to be generated bythe company will be achieved through the projects in existence in the other subsidiaries of Kedco plc, namely Kedco Investment Co. 1Limited, Kedco Investment Co. 2 Limited, Reforce Energy Limited, Kedco Fabrication Limited and all of the subsidiary undertakings ofthese undertakings.

In the opinion of the directors, the shares in the remaining subsidiary undertakings as at 30th June 2013 are worth at least the amountsat which they are stated in the balance sheet. Details of subsidiary undertakings are set out in Note 22.

The Group carried out a further assessment of the carrying value of the investment with reference to the future cash flows of projectscurrently undertaken by the Group as at 30th June 2013, and has determined that no additional impairment is required for the currentperiod.

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SubsidiariesDetails of Kedco plc subsidiaries at 30th June 2013 are as follows:

Name Country of Incorporation Shareholding Principal Activity

Kedco Investment Co. 1 Limited Republic of Ireland 100% Investment companyKedco Investment Co. 2 Limited Republic of Ireland 100% Investment companyReforce Energy Limited Republic of Ireland 100% Renewable energy development companyPluckanes Windfarm Limited Republic of Ireland 100% Generation of electricity through windKedco Fabrication Limited Republic of Ireland 100% Contracting companyEnfield Biomass Limited United Kingdom 100% Energy utility companyReforce Energy (West) Limited Republic of Ireland 100% Dormant companyKedco Block Holdings Limited Republic of Ireland 100% Investment / dormant companyKedco Power Limited Republic of Ireland 100% Cost centre / dormant companyGranig Trading Limited Republic of Ireland 100% Dormant companyCastle Home Supplies Limited Republic of Ireland 100% Dormant companyKedco Energy Limited Republic of Ireland 100% Dormant companyKedco Group Holdings USA Inc. United States of America 100% Dormant companyArdstown Investments Limited Republic of Ireland 100% Dormant company

The shareholding in each company above is equivalent to the proportion of voting power held.

The registered office for all of the above companies is Building 4600, Cork Airport Business Park, Kinsale Road, Cork, except for EnfieldBiomass Limited, whose registered office is Gibbs Road, Montagu Industrial Estate, London N18 3PU, England; and Kedco GroupHoldings USA Inc., whose registered office is 2711 Centreville Road Suite 400, Wilmington, DE 19808, USA.

Details of acquisition and disposal of subsidiary undertakings during the year are described in notes 38 and 39 of the financialstatements.

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Investment in Jointly Controlled Entities

Details of the Group’s interests in jointly controlled entities at 30 June 2013 are as follows:

Name of Jointly Controlled Entity Country of Incorporation Shareholding Principal ActivityNewry Biomass Limited Northern Ireland 50%* Energy Utility CompanyAsdee Renewables Limited Republic of Ireland 50% Energy Utility CompanyBridegreen Energy Limited Republic of Ireland 50% Energy Utility Company

* The Group owns 50% of the shares of Newry Biomass Limited. However, as noted in Note 21 above, during the year ended 30th June2012, the Group received loan notes from Newry Biomass Limited which entitles the holders to a share of the profits of the company. Basedon the holding of shares and loan notes, the Group is entitled to a share of 92% of the profits and losses of the company.

Apart from Newry Biomass Limited, none of the above companies have commenced trading as at 30th June 2013.

During the year ended 30th June 2013, the Group acquired the remaining 50% of the share capital of Enfield Biomass Limited, transformingthe company from a jointly controlled entity to a subsidiary undertaking of the company. Details of this acquisition are noted in Note 38of the financial statements.

Summarised financial information in respect of the group’s interests in jointly controlled entities is as follows:

2013 2012f f

Non-Current Assets 14,347,412 11,095,301Current Assets 71,142 4,863,923Non-Current Liabilities (6,491,371) (6,892,749)Current Liabilities (7,456,417) (9,705,017)

Net Assets / (Liabilities) 470,766 (638,542)

Group’s Share of Net Assets / (Liabilities) of Jointly Controlled Entities 187,068 (509,599)

Total Revenue 16,610 -Total Expenses (12,790) (321,078)Total Gain / (Loss) for the Year 3,820 (321,078)

Group’s share of profits / (losses) of jointly controlled entities 3,811 (213,923)

Inventories 2013 2012f f

GroupRaw Materials - -Finished Goods - 50,000

- 50,000

The cost of inventories recognised as an expense during the year in respect of continuing operations was f2,662,922 (2012: f10,123,726).

The cost of inventories recognised as an expense during the year in respect of write-downs of inventory to net realisable value amountedto fNil (2012: f60,237).

23

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Construction Contracts

Contracts in progress at the Balance Sheet Date:2013 2012

Construction Costs Incurred Plus Recognised Profits o o

Less Recognised Losses To Date 12,405,063 11,386,985Less Payment Received In Advance (13,130,733) (11,141,863)

(725,670) 245,122

Recognised and Included in the Financial Statements as amounts due:From Customers Under Construction Contracts 293,637 1,355,212To Customers Under Construction Contracts (1,019,307) (1,110,090)

(725,670) 245,122

At 30th June 2013, retentions held by customers for contract work amounted to oNil (2012: oNil). Advances received from customersfor contract work amounted to o13,130,733 (2012: o11,141,863).

The following table shows an aged analysis of amounts due from customers under construction contracts (being construction costs incurredon projects plus recognised profits less recognised losses to date)::

2013 2012o o

Costs incurred in the past twelve months 244,126 850,996Costs incurred between twelve and twenty-four months 6,844 35,453Costs incurred between twenty-four and sixty months 42,667 468,763

293,637 1,355,212

Of the balance of o293,637 (2012: o1,355,212), oNil (2012: o832,612) relates to the construction of a 4MW Gasification plant inNorthern Ireland. The principal customer for this contract is Newry Biomass Limited, a jointly controlled entity of the Group. NewryBiomass Limited has put in place financing facilities and is paying the Group for work carried out on a regular basis. The directors of theGroup are satisfied, from this review, that the Group’s exposure to credit risk with respect to the above projects is manageable, as describedin Note 5.

During the year, the group acquired o162,075 of project costs by way of business acquisition (2012: oNil).

Trade and Other Receivables 2013 2012f f

GroupTrade Receivables 1,959,737 2,325Provision for Impairment of Trade Receivables - -

1,959,737 2,325

Amounts Due from Jointly Controlled Entities 63,153 1,469,169VAT Receivable 38,166 47,972Prepayments 115,982 43,785Corporation Tax 101 101Other Receivables 42,166 42,166

2,219,305 1,605,518

25

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Trade and Other Receivables (continued)

The following table shows an analysis of trade receivables split between past due and within terms accounts. Past due is when anaccount exceeds the agreed terms of trade, which are typically 60 days.

2013 2012f f

Within Terms - -Past due more than one month but less than two months - -Past due more than two months 1,959,737 2,325

1,959,737 2,325

Included in the Group’s trade receivables balance are debtors with carrying amount of f1,959,737 (2012: f2,325) which are past due atyear end and for which the Group has not provided. Of this f1,959,228 is due from Newry Biomass Limited (‘Newry’), a jointly controlledentity of the group, to Kedco Fabrication Limited, a subsidiary of the group and the EPC contractor for the Newry project. Newry hasbanking facilities available from Ulster Bank Ireland Limited. The GE Jenebacher engine was commissioned by Clarke Energy on 7thSeptember 2012 with the gasifier commissioned and taken over by Newry on 4th June 2013.

Following the formal commissioning hand over, Kedco Fabrication Limited has been focused on completing various tests and reportsrequired by Ulster Bank Ireland Limited in connection with the drawdown of debt facilities for Phase 2 of the project. The banks technicaladviser, Mott McDonald, have completed their report and submitted it to Ulster Bank for their approval. Newry is currently in discussionswith Ulster Bank regarding this report and the timing for the drawdown of facilities for Phase 2, which will facilitate the payment of theabove trade receivable.

The Group does not hold any collateral over these balances. No interest is charged on overdue receivables. The quality of past due notimpaired trade receivables is considered good. The carrying amount of trade receivables approximates to their fair values.

Apart from Newry Biomass Limited, which is explained in detail above, the Group has recognised an allowance for doubtful debts of 100%where appropriate against all receivables over 120 days because historical experience has been that trade receivables that are past duebeyond 120 days are not recoverable. Allowances for doubtful debts are recognised against trade receivables between 60 days and 120days based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysisof the counterparty’s current financial position.

In determining the recoverability of a trade receivable, the Group considers any changes in the credit quality of the trade receivable fromthe date credit was initially granted up to the end of the current reporting period. Apart from Newry Biomass Limited, which is explainedin detail above, the concentration of the credit risk is limited due to the customer base being large and unrelated, and the fact that no onecustomer holds balances that exceeds 10% of the gross assets of the Group. The maximum exposure risk to trade and other receivablesat the reporting date by geographic region is as follows:

2013 2012f f

Ireland 509 2,325United Kingdom 1,959,228 -Eurozone Countries - -

1,959,737 2,325

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Trade and Other Receivables (continued)

Other receivables related to unpaid share capital of f40,000 (2012: f40,000) and deposits on rental contracts amounting to f2,166(2012: f2,166). Apart from receivables relating to share capital, the aged analysis of other receivables is within terms. Other receivablesrelating to share capital, totalling f40,000 (2012: f40,000) are older than two years but have been reviewed by management and it isbelieved that the credit risk is limited due to the matching of liabilities.

There is no concentration of credit risk with respect to receivables as disclosed in Note 5 under credit risk.

2013 2012Company f f

Amounts due from subsidiary undertakings 11,852,313 18,282,438Prepayments 11,722 13,045Corporation Tax 96 96VAT Receivable 437 435Other receivables 40,000 40,000

11,904,568 18,336,014

The concentration of credit risk in the individual financial statements of Kedco plc relates to amounts due from subsidiary undertakings.The directors have reviewed these balances in the light of the impairment review carried out on the investments by Kedco plc in itssubsidiaries.

The Directors considered the future cash flows arising from subsidiaries and are satisfied that no impairment is required on these balances.

The reduction in amounts due from subsidiary undertakings is due to the offset of group balances, together with the write off of balancestotalling f1,078,402.

Share Capital Kedco plc

At 30th June 2012 Authorised Allotted and Authorised Allotted and Number Called up Number Called up

f f

Ordinary Shares of f0.01 each 10,000,000,000 311,562,785 100,000,000 3,115,628

‘A’ Shares of f0.01 each 10,000,000,000 99,117,952 100,000,000 991,180

At 30th June 2013 Authorised Allotted and Authorised Allotted and Number Called up Number Called up

f f

Ordinary Shares of f0.01 each 10,000,000,000 1,118,502,058 100,000,000 11,185,020

‘A’ Shares of f0.01 each 10,000,000,000 99,117,952 100,000,000 991,180

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Share Capital (continued)

The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of thecompany. All ordinary shares are fully paid up, with the exception of f40,000 which is disclosed in Note 26.

The Company was incorporated on 2nd October 2008 with an initial authorised share capital of f100,000,000 divided into 100,000,000ordinary shares of f1.00 each of which 38,100 ordinary shares of f1.00 each fully paid up were issued.

On 14th October 2008 the ordinary shares were subdivided so that each ordinary share had a nominal value of f0.01 each as opposedto the previous nominal value of f1.00 each.

On 3rd December 2010, the trading denomination of the Company’s ordinary shares of f0.01 each changed from Euro to pounds sterling.This does not affect the nominal valuation of the shares.

Reverse asset acquisitionOn 13th October 2008, the Company acquired the entire issued share capital of Kedco Block Holdings Limited (‘KBHL’) in considerationfor the allotment and issue of 2,493,081 ordinary shares of f1.00 each to the former members of KBHL. Pursuant to the agreement, theCompany allotted and issued one ordinary share of f1.00 each in consideration for the transfer to it of each share held in KBHL.

The fair value of the shares in Kedco Block Holdings Limited received as consideration for the issue of these shares in Kedco plc wasf34,903,134 which resulted in a share premium in the Company of f32,908,669. From a Group perspective, since the acquisition wasaccounted for as a reverse asset acquisition, the shares of the new legal parent (Kedco plc) were recognised and the shares of the accountingparent (Kedco Block Holdings Limited) were derecognised. A reverse acquisition adjustment has been made for the share capital of theaccounting parent and was offset against the share premium of the new legal parent.

Movements in the year to 30th June 2013Kedco plc:�

�

�

�

Share premium relates to the share premium arising on share issues.

On 27th November 2012, as part of a restructuring process designed to strengthen the Company’s balance sheet by the reduction ofdebt, the Company issued 540,070,386 new ordinary shares of f0.01 each at a premium of f41,388 in exchange for debt in theGroup totalling f5,442,091. At the same time, the Company’s major shareholder, Farmer Business Developments plc (‘FBD’) agreedto convert f326,184 of its unsecured notes into 32,352,620 warrants so as not to trigger the mandatory bid requirements of the IrishTakeover Code. The warrants, which do not carry a coupon, are convertible to ordinary shares, on a one-for-one basis, at any time byFBD. Further details of the debt converted into equity under this process are discussed in Note 29 of the financial statements.

On 27th November 2012, in conjunction with the above restructuring process, the Company issued 95,129,619 ordinary shares off0.01 each at a premium of f4,959.

On 21st December 2012, the Company issued 139,386,678 ordinary shares of f0.01 each at a premium of f6,133 as part satisfactionof the acquisition of Reforce Energy Limited. Further details of this acquisition are disclosed in Note 38 of the financial statements.

On 21st December 2012, as a result of the above acquisition, FBD converted its 32,352,620 warrants as disclosed above into 32,352,620ordinary shares of f0.01 each at a premium of f2,658.

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Reserves2013 2012

Equity Settled Employee Benefits Reserve s s

Balance at Beginning of the Financial Year - 492,580Credit arising on not meeting non-market based vesting conditions - (492,580)

Balance at End of the Financial Year - -

The equity settled employee benefits reserve arises on the grant of share options to employees under the employee share option plan.The expense was reversed in the prior year as conditions attaching were not met. Further information about share-based payments toemployees is set out in Note 34.

Borrowings2013 2012

Non-Current Liabilities s s

GroupSecured at amortised costInvestor Loan (ii) Secured at 10% 599,523 -Bank Loans (iv) - 1,925,025

599,523 1,925,025Financial liabilities carried at fair value through profit or lossPreference shares (v) at 8% 640,000 600,000Business Expansion Scheme Shares (vi) 105,000 -

745,000 600,000

1,344,523 2,525,025

Current Liabilities 2013 2012s s

Bank Overdrafts 166,373 150,000Investor Loans (ii) - Secured - 400,000

- Unsecured - 2,911,191Zero-Coupon Loan Notes (i) - 3,956,621Vudlande Loan (iii) - 1,050,000Bank Loans (iv) 3,100,356 1,193,833

3,266,729 9,661,645

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29

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Borrowings (continued)2013 2012

Company s s

Non-Current LiabilitiesSecured at amortised costInvestor Loan (ii) Secured at 10% 599,523 -

Current Liabilities 2013 2012s s

Bank Overdrafts 5 -Zero-Coupon Loan Notes (i) - 3,956,620Investor Loans (ii) - Secured - 400,000

- Unsecured - 2,323,782

5 6,680,402

Summary of Borrowing ArrangementsThe Group has secured debt funding from banks and from its equity investors throughout the reporting year in order to finance capitalinvestment and working capital. The principal loan arrangements entered into are as follows:(i)

(ii)

29

On 5th July 2010, the Company raised e3.2m (£2.6m) from the issue of 3,588,583 Zero-Coupon Secured Loan Notes.

On 10th September 2012, the Group announced a proposed restructuring to remove debt obligations from the Company such thatit would have a suitable basis on which to raise further equity finance. As part of this restructuring, it was agreed that the holdersof the Zero-Coupon Secured Notes would take on a 40% reduction in the interest payable on the Notes, equivalent to £401,921(s499,033), and this reduction was recorded in the financial statements for the year ended 30th June 2012.

On 27th November 2012, the restructuring process was completed, and the Zero-Coupon Secured Note holders was satisfied by(a) the transfer of the group’s interest in Kedco Block Limited, which included the Group’s 80% interest in SIA Vudlande, to CornhillAsset Management Limited, acting on behalf of the holders of the Zero-Coupon Secured Notes for consideration of s3,000,000;and (b) the issue of 99,236,914 ordinary shares of s0.01 each in Kedco plc to the holders of the Zero-Coupon Secured Notes. Thetotal value of loans and accrued interest converted was s3,997,542. The loan note holders have entered into a ‘lock-in’ restrictionwhereby they are unable to dispose of the new Ordinary Shares that they have received pursuant to the restructuring for a periodof two years from the date of admission.

A loan of s1,000,000 was received from equity investors during the year ended 30th April 2007 to finance the general workingcapital requirements of the Group. These equity investors are a director and his close family. At 30th June 2013, a balance ofs587,409 remained payable. The remaining s587,409 loan is repayable on demand between 24th May 2012 and 24th November2013. This loan is unsecured and carries an annual interest rate of 2% over the prime lending rate of Allied Irish Banks plc Interestis payable monthly.

On 10th September 2012, the Group announced a proposed restructuring to remove debt obligations from the Company such thatit would have a suitable basis on which to raise further equity finance. As part of this restructuring, it was agreed that the holdersof the above investor loan would take on a 40% reduction in the interest payable on the loan to date, ie s7,440. This accruedinterest was included in accruals under the category ‘Trade and Other Payables’ in the prior year. On 27th November 2012, therestructuring process was completed, and the holders of the above mentioned loan was satisfied by the issue of 59,922,665 ordinaryshares of s0.01 each in Kedco plc. The total value of loans and accrued interest converted was s604,149. The loan note holdershave entered into a ‘lock-in’ restriction whereby they are unable to dispose of the new Ordinary Shares that they have receivedpursuant to the restructuring for a period of two years from the date of admission.

Investor loans of s1,219,028 were received during the year ended 30th June 2010. Of the total s1,219,028 received, s250,000is secured on the 75kW combined heat and power modular bio power system included in inventories at 30th June 2012 ands150,000 is secured by personal guarantees from certain directors.

On 10th September 2012, the Group announced a proposed restructuring to remove debt obligations from the Company such thatit would have a suitable basis on which to raise further equity finance. As part of this restructuring, it was agreed that the holdersof the above Investor Loans would take on a 40% reduction in all interest that had been accrued and remained unpaid to date,equivalent to s60,258. At 30th June 2012, the outstanding loan balance and accrued interest was s365,387.

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Borrowings (continued)Summary of Borrowing Arrangements (continued)(ii)

(iii)

29

(Continued)On 27th November 2012, the restructuring process was completed, and the holders of the above Investor Loans was satisfied by(a) the transfer of the Group’s interest in 75kW combined heat and power modular bio power system to one of the holders of theInvestor loan for consideration of s50,000; and (b) the issue of 31,281,705 ordinary shares of s0.01 each in Kedco plc to theholders of the above investor loans. The total value of loans and accrued interest converted was s365,367. The loan note holdershave entered into a ‘lock-in’ restriction whereby they are unable to dispose of the new Ordinary Shares that they have receivedpursuant to the restructuring for a period of two years from the date of admission.

The remaining investor loans of s819,028 received during the year ended 30th June 2010 are unsecured, have no fixed interestrate and have no fixed repayment date. These funds were advanced to finance working capital. At 30th June 2012, a balance ofs64,638 was payable to investors at 30th June 2012. As part of the above restructuring process noted above, the holders of theremaining unsecured investor loans were satisfied by the issue of 64,111,146 ordinary shares of s0.01 each in Kedco plc. The valueof the loans converted was s64,638. The loan note holders have entered into a ‘lock-in’ restriction whereby they are unable todispose of the new Ordinary Shares that they have received pursuant to the restructuring for a period of two years from the dateof admission.

During the year ended 30th June 2011 s1,200,000 was received from its 26.79% shareholder, Farmer Business Developments plc(‘FBD’) to assist its short term working capital requirements. These funds were repayable as from 1st May 2011, with an interestpayment on outstanding capital of 10% per annum. During the year ended 30th June 2012, a further s1,200,000 was receivedfrom FBD to assist its short term working capital requirements. These funds were repayable as from 1st April 2012, with an interestpayment on outstanding capital of 10% per annum. At 30th June 2012, the outstanding loan balance and accrued interest wass2,293,757.

On 10th September 2012, the Group announced a proposed restructuring to remove debt obligations from the Company such thatit would have a suitable basis on which to raise further equity finance. As part of this restructuring, it was agreed that FBD wouldaccept a 40% reduction in all interest that had been accrued and remained unpaid to date, equivalent to s99,694. At 30th June2012, the outstanding loan balance and accrued interest was s2,293,757. A further s32,428 interest was accrued from the period1st July 2012 to the date the restructuring was agreed with FBD.

On 27th November 2012, the restructuring process was completed, and the FBD loan was satisfied by the issue of 198,370,398ordinary shares of s0.01 each and the issue of 32,352,620 warrants, convertible into ordinary shares of s0.01 each in Kedco plc,on a one-for-one basis, at any time of FBD’s choosing. FBD exercised their option to convert these warrants into shares on 21stDecember 2012. The total value of loan and accrued interest converted was s2,326,184. FBD have entered into a ‘lock-in’restriction whereby they are unable to dispose of the new Ordinary Shares that they have received pursuant to the restructuringfor a period of two years from the date of admission.

On 28th March 2013, £500,000 was received from investors, including £400,000 from FBD, by way of unsecured loans to fundits on-going development and working capital requirements. These funds are repayable as from 1st April 2016, with an interestpayment on outstanding capital of 10% per annum, such interest to be accrued and rolled up to 1st April 2016. The drawdownportion of the facility may be converted at any time after 15th April 2013 into Ordinary Shares in Kedco; with the conversion pricebeing the average of the closing mid-market price of the ten working days prior to conversion or the placing price achieved underany future equity fundraising. FBD would not be able to convert any proportion of the Facility into Kedco ordinary shares if to doso would result in FBD holding in excess of 29.9% of Kedco’s issued share capital. At 30th June 2013, the balance of the accruedloans and interest totalled s599,523.

A loan of s1,650,000 was received from directors (s500,000) and external investors (s1,150,000) during the year ended 30thApril 2007 to develop the SIA Vudlande plant in Latvia. s340,000 was repaid to directors during the year ended 30th June 2010.During the year ended 30th June 2011, s260,000 was converted by the investors into Zero-Coupon secured loan notes as describedin note (i) above, resulting in an outstanding balance of s1,050,000 at year end. This loan is unsecured and carries an annualinterest rate of 15%. The term is five years with repayment dates between 31st January 2011 and 26th March 2012. Interest isrepayable annually.

On 10th September 2012, the Group announced a proposed restructuring to remove debt obligations from the Company such thatit would have a suitable basis on which to raise further equity finance. As part of this restructuring, it was agreed that the holdersof the above loan would take on a 40% reduction in the interest payable on the loan ies104,500. This accrued interest is includedin accruals under the category ‘Trade and Other Payables’.

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Borrowings (continued)Summary of Borrowing Arrangements (continued)

(iv)

�

�

�

(v)

(vi)

The directors consider the carrying amount of borrowings approximates to their fair values.

29

(Continued)On 27th November 2012, the restructuring process was completed, and the above loan and accrued interest was satisfied by theissue of 122,034,964 ordinary shares of s0.01 each. The total value of loans and accrued interest converted was s1,230,375. Theloan note holders have entered into a ‘lock-in’ restriction whereby they are unable to dispose of the new Ordinary Shares that theyhave received pursuant to the restructuring for a period of two years from the date of admission.

Bank loans were entered into in the year ended 30th April 2006 to fund acquisition of freehold land and buildings by Castle HomeSupplies Limited. The loan balance at 30th June 2013 was s1,890,201 (2012: s1,925,025).

This loan carries interest at base rate varying plus 2.5% and is repayable in 2031 according to the terms of the original agreement.This loan is secured by personal guarantees from three former directors and one current director, totalling s750,000 and a chargeover the freehold land and buildings of Castle Home Supplies Limited, a subsidiary company.

Bank loans were entered into in the year ended 30th April 2007 to fund working capital:

An additional bank loan of s599,568 was taken out during the year ended 30th April 2007 for the purpose of meeting workingcapital requirements. This loan carries an interest rate of base rate varying plus 3.1%. This loan is secured by personal guaranteesfrom three former directors and one current director. The balance at 30th June 2013 was s655,614 (2012: s633,603). This ispresented within current bank loans

Liabilities include bank loans in the amount of sNil (2012: s80,230) for a stocking loan. This is secured by a letter of guaranteefrom three former directors and one current director, a floating charge over assets of Kedco Energy Limited, a subsidiary company,and assignments over policies on the life of nominated individuals. Interest on the stocking loan is the Ulster Bank’s cost of fundsrate plus 2.75%. This loan is presented within current bank loans.

Business credit lines were received in 2007 for working capital. The balance outstanding at 30th June 2013 was s554,541 (2012:s499,999). Interest is a varying business credit line rate. The facility is secured by letters of guarantee from three former directorsand one current director as noted above and a charge over the commercial warehouse at Portgate Business Park, Monkstown, Co.Cork. This is presented within current bank loans.

Preference SharesKedco Power Limited issued 500,000 8% cumulative redeemable convertible preference shares of s1 each at par to EnterpriseIreland, the Irish Government agency responsible for the global expansion of Irish companies, in the year ended 30th June 2010,realising s500,000. The preference shares will be convertible at the option of the holder in the event that investment of at leasts2m is secured by Kedco plc, or Kedco Power Limited, within five years from the date of allotment of the preference shares andwould convert into ordinary shares in either Kedco plc or Kedco Power Limited respectively. The shares are unsecured borrowingsof the Group and are designated as fair value through profit or loss.

BES SharesAs part of the acquisition of Reforce Energy Limited and subsidiaries, the group took responsibility over 105,000 ‘B’ Ordinary Sharesof s1 each issued by Reforce Energy Limited as part of the Business Expansion Scheme. As part of this scheme, Kedco InvestmentCo. 1 Limited entered into a put and call option agreement, dated 20th December 2012, whereby Kedco Investment Co. 1 Limitedmay be required to purchase the outstanding ‘B’ Ordinary Shares in Reforce Energy Limited at a price to be agreed with betweenKedco Investment Co. 1 Limited and the holders of the ‘B’ Ordinary Shares in Reforce Energy Limited. The option may be exercisedon any date between 1st January 2017 and 31st March 2017. Under the provisions of IAS 32 Financial Instruments: Presentation,the above shares have been disclosed as a financial liability.

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Finance Lease LiabilitiesFinance lease liabilities relate to motor vehicles and plant and machinery. Lease terms vary from 3-5 years. The Group has options topurchase the related assets for a nominal amount at the conclusion of the lease agreements. The Group’s obligations under financeleases are secured by lessors’ title to the leased assets.

2013 2012h h

Minimum Lease PaymentsNo later than 1 Year - 375Later than 1 Year and not later than 5 Years - -

- 375Less Future Finance Charges - (2)Present Value of Minimum Lease Payments - 373

Present Value of Minimum Lease PaymentsNo later than 1 Year - 373Later than 1 Year and not later than 5 Years - -Present Value of Minimum Lease Payments - 373

Included in the financial information as:Current Liabilities - 373Non-Current Liabilities - -

The fair value of finance lease liabilities is approximately equal to their carrying amount.

Trade and Other Payables2013 2012

Group h h

VAT Payable 499,603 531,374Trade Payables 1,070,777 646,646Other Payables 42,144 42,291Accruals 1,540,030 1,250,954Amounts due to Jointly Controlled Entities 1 2PAYE and Social Welfare 76,002 24,499

3,228,557 2,495,766

The carrying amount of trade and other payables approximates fair value. All trade and other payables fall due within one year.

Company h h

Trade Payables 207,912 64,261Amounts Due to Subsidiary Undertakings - 5,711,206PAYE and Social Welfare 41,490 -Accruals 562,166 255,414

811,568 6,030,881

The carrying amount of trade and other payables approximates fair value. All trade and other payables fall due within one year.

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Deferred Tax Liability 2013 2012h h

At the beginning of the financial year - 268,062Reclassified as liabilities associated with assets held for sale - (268,062)At the end of the financial year - -

The deferred tax liability recognised in the prior year has now been reclassified as liabilities associated with assets held for sale in thecurrent year (See Note 16).

A deferred tax asset has not been recognised at the balance sheet date in respect of trading tax losses. Due to the history of pastlosses, the company has not recognised any deferred tax asset in respect of tax losses to be carried forward which are approximatelyh12.6m at 30th June 2013.

Operating Lease ArrangementsOperating leases relate to office facilities with lease terms varying from 5 years to 25 years and a rent review every 5 years. The Groupdoes not have an option to purchase the leased asset at the expiry of the lease period.

2013 2012h h

Operating lease charges 20,000 20,000

At the balance sheet date, the Group has commitments under non-cancellable operating leases which fall due as follows:

Within one year 20,000 20,000Longer than 1 year and not longer than 5 years - -Longer than 5 years - -

Share Based PaymentsOn 16th October 2008, the Group established a Long-Term Incentive Plan (the ‘LTIP’) under the terms of which certain employeessubscribed for ‘A’ Shares at a subscription price being the par value of h0.01 each that reflected the restricted nature and contingentvalue attaching to such shares. In the year ended 30th June 2012, the Group determined that the conditions attaching to the conversionof these shares were not met and so reversed the share-based payment reserve. The movement relating to the prior year is as follows:

Issue Date Number of ‘LTIP’ Issue Price Fair Value Expense in Credit in ‘A’ Shares at Issue Date Income Statement Income Statement

for the year ended for the year ended30th June 2013 30th June 2012

16th October 2008 49,256,332 g0.01 g0.01 - (g492,580)

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Related Party TransactionsTransactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated onconsolidation. Details of transactions between the Group and other related parties are disclosed below.

During the reporting year the Group received finance from its related parties. There were no further related party transactionsother than the remuneration of key management.

Financing TransactionsThe following transactions have taken place with members of the Board:

2013 2012Amounts Owed to Directors: e e

Zero-Coupon Loan Notes (Note 29) - 612,838Investor loans (Note 29) - 587,909

Financing transactionsDuring the year ended 30th June 2013 e1,200,747 of the investor loans was repaid to members of the Board by means ofconverting the debt into 75,293,398 Ordinary shares of e0.01 each in the Company (2012: e12,500 repaid to members of theboard). Details of the debt-to-equity conversion are detailed in Note 29 of the financial statements

The company entered into a put and call option and a second call option relating to the shares in Enfield Biomass Limited with theother party in the joint venture, Wellwin Investments Limited, a company incorporated in Ireland. One of the shareholders ofWellwin Investments Limited, who controls 32.5% of the company, is a director of Kedco plc. As part of the agreement, Kedcoplc had guaranteed to repay the debt of e990,000 owed by Enfield Biomass Limited to Wellwin Investments Limited, and to paya facility fee of 5% of the loan outstanding to Wellwin Investments Limited. During the year ended 30th June 2012, Kedco plcpaid e272,500 to Wellwin Investments Limited by way of its own investment in Enfield Biomass Limited. At 30th June 2012, thedebt stood at e220,000. Warrants attaching to these loans total 4,050,000 at a subscription price of the lowest listed share pricebetween signing of the agreement and the date that the outstanding balance of the loan is paid to Wellwin Investments Limited,exercisable at any date up to 30th June 2014.

On 10th October 2012, the Group announced a restructuring to remove debt obligations from the Company. Included in thisrestructuring is the conversion of the Wellwin Investments loan plus accrued facility fee less a discount of 40% to equity in Kedcoplc. Wellwin have entered into a ‘lock-in’ restriction whereby they are unable to dispose of the new Ordinary Shares that they havereceived pursuant to the restructuring for a period of two years from the date of admission.

On 27th November 2012, the group converted the Wellwin Investments loan plus accrued interest into 22,812,593 ordinary sharesof e0.01 each in Kedco plc. The amount of the loan converted was e220,000.

A development fee of e255,000 will be paid to Wellwin within five business days of the financial close of project finance for theproject known as the Enfield Biomass project.

Finance costs recognised in the income statement in respect of loans from members of the Board amounted to:

2013 2012e e

Zero-Coupon Loan Notes (Note 29) - 14,039Investor loans (Note 29) (5,982) 29,760Wellwin Facility Charge (See above) (6,946) 15,813

(12,928) 59,612

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Related Party Transactions (continued)Included in accruals at 30th June 2013 is finance costs payable of cNil relating to loans from members of the Board (2012:c29,668).

One current director and three former directors have provided personal guarantees to Allied Irish Bank plc for bank loans andbusiness credit line facilities – see Note 29 for details.

Key Management RemunerationKey management personnel of Kedco plc consist of the Board of Directors as they are responsible for planning, directing andcontrolling the activities of the Group.

The remuneration of directors during the year presented was as follows:2013 2012

c c

Fees for services as directors 39,000 67,000Remuneration for other services 392,500 325,000

431,500 392,000

Remuneration earned by each director during the financial year ended 30th June 2013 is as follows:

Emoluments and Long Term Pension TerminationCompensation Incentive Plan Contributions Payments

h h h h

William Kingston 5,000 - - -Gerry Madden 250,000 - - -Edward Barrett - - - -Brendan Halpin 75,000 - - -Dermot O’Connell 24,000 - - -Steve Dalton 67,500 - - -Diarmuid Lynch 5,000 - - -Donal O’Sullivan 5,000 - - -

431,500 - - -

At 30th June 2013, directors’ remuneration unpaid amounted to h268,577 (2012: h242,167).

The Company and the Group are controlled by the Board of Directors.

No long term incentive plan (‘LTIP’) shares were issued during the financial year ended 30th June 2013. At 30th June 2012, 49,256,332‘LTIP’ shares were in issue (see Note 34). Details of each director’s shareholding that were in office at the year-end are shown in theDirectors’ Report.

Consultancy costs paid to a company controlled by one of the directors amounted to h52,000 in the year to 30th June 2013 (2012:h53,000). Included in trade payables at 30th June 2013 is h6,150 payable with respect to these consultancy costs (2012: hNil).

During the year, the Board agreed to grant warrants to Mr Gerry Madden over a total of 30,000,000 ordinary shares of the company.The purpose of the warrants is to incentivise the CEO during a key phase in the development of the company. The warrants areexercisable by Mr Madden at a price of £0.016 per ordinary share and are exercisable at any time prior to the third anniversary of theirissue.

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Notes to the Consolidated Financial Statements - (continued)

for the Year Ended 30th June 2013

Related Party Transactions (continued)

Other Related Party Transactions 2013 2012h h

Amounts owed to external investors:Investor loans (Note 29) 479,772 2,293,757Vudlande loan (Note 29) - 700,000

The loan of h2,293,757 at 30th June 2012 was advanced by Farmer Business Development plc, the 26.79% shareholder of theCompany to the Group. This was converted into equity during the year as part of the Group’s restructuring process. Full details ofthe restructuring process are outlined in Note 29 of the financial statements.

During the year, Farmer Business Developments plc advanced GB£400,000 to the group. Details of this facility are outlined in Note 29of the financial statements.

The Vudlande loan relates to monies advanced by close family members of one of the directors. These loans and the accruedinterest were converted into 82,187,324 ordinary shares of Kedco plc as part of the restructuring process outlined in detail in Note29 of the financial statements.

Finance costs recognised in the income statement in respect of loans from related parties amounted to:

2013 2012h h

Investor loans (Note 29) 44,884 96,555Vudlande loan (Note 29) 15,750 29,750

60,634 126,305

Included in accruals at 30th June 2013 is finance costs payable on Vudlande loan of hNil relating to loans from related parties (2012:h112,875). Interest from investor loan has been rolled up into loan balance when converted into ordinary shares, as noted above.

Jointly Controlled EntitiesDetails of amounts advanced to and received from jointly controlled entities are as follows:

2013 2012Amounts advanced to Jointly Controlled Entities: h h

Loans to Jointly Controlled Entities (disclosed under Financial Assets in Note 21) 6,233,268 7,608,687

Balances Due from Jointly Controlled Entities (disclosed under Trade and Other Receivables in Note 26) 63,153 1,469,169

Amounts Payable to Jointly Controlled Entities:Balances due to Jointly Controlled Entities (disclosed under Trade and Other Payables in Note 31) 1 2

During the year ended 30th June 2013, sales of h2,663,824 were made to jointly controlled entities (2012: h10,031,773). During theyear a consultancy fee of hNil (2012: h548,025) was charged to Enfield Biomass Limited for services provided. Included in trade andother receivables at 30th June 2013 are balances of h1,959,228 relating to jointly controlled entities (2012: h538,602). Included inamounts due to customers under construction contracts is h1,019,307 (2012:h1,110,090) relating to amounts received from jointlycontrolled entities.

During the year ended 30th June 2013, Kedco Investment Co.2 Limited, a subsidiary undertaking of Kedco plc, acquired the remaining50% shareholding of Enfield Biomass Limited (see Note 38), which previously operated as a joint venture vehicle of the Group todevelop a biomass electricity and heat generating plant in Enfield, London. As a result of the acquisition, the loan notes issued by EnfieldBiomass Limited to the Group, valued at h990,000 on 30th June 2012, have been eliminated on consolidation.

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Cash and Cash EquivalentsFor the purposes of the cash flow statement, cash and cash equivalents include cash on hand and in banks and bank overdrafts. Cashand cash equivalents at the end of the financial year as shown in the cash flow statement can be reconciled to the related items in thebalance sheet as follows:

Group 2013 2012g g

Cash and Bank Balances 22,150 144,764Cash and Bank Balances included in Assets Held for Sale (Note 16) - 128,280Bank Overdrafts (166,373) (150,000)Bank Overdrafts Associated with Assets Held for Sale (Note 16) - (467,140)

(144,223) (344,096)CompanyCash and Bank Balances 20,654 14,331Bank Overdrafts (5) -

20,649 14,331

Major Non-Cash TransactionsDuring the current year, the Group entered into the following non-cash investing and financing activities which are not reflected in theconsolidated statement of cash flows:

The Group settled a total of g8,492,091 of debt as follows:(i)(ii)(iii)

Business CombinationsSubsidiaries Acquired

Name of Subsidiary Principal Activity Date of Acquisition Proportion of Voting ConsiderationEquity Interests Acquired Transferred

% e

Enfield Biomass Limited Energy Utility Company 27th November 2012 50 10,000Reforce Energy and subsidiaries Renewable energy

development company 21st December 2012 100 2,000,0002,010,000

Enfield Biomass Limited (‘Enfield’) was acquired as part of restructuring process undertaken by the Group. The Group had previouslyowned 50% of the share capital of Enfield Biomass Limited and had accounted for it in the prior year as a jointly controlled entity. Enfieldis the special purpose vehicle for developing the 12MW CHP project in Enfield, London.

Reforce Energy Limited and its 100% subsidiaries, Pluckanes Windfarm Limited and Reforce Energy (West) Limited, (‘Reforce’) wasacquired with the objective of increasing the Group’s pipeline of projects under development and to add depth to the managementteam.

Issuing ordinary shares in Kedco plc at a value of g5,442,091 (see Note 29 for more details);The disposal of a subsidiary at a value of g3,000,000 (see Note 39 for details); andThe transfer of inventory valued at g50,000.

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Business Combinations (continued)

Consideration TransferredReforce Enfield Total

e e e

Shares issued (139,396,679) Ordinary Shares 1,400,000 - 1,400,000Conversion of equity in jointly controlled entityinto Ordinary Shares - 10,000 10,000Contingent equity consideration (see (i) below) 600,000 - 600,000

2,000,000 10,000 2,010,000

(i) The contingent equity consideration requires the Group to make a further issue of 59,737,418 ordinary shares in Kedco plc to theformer shareholders of Reforce when Reforce obtains eight planning permissions for renewable energy projects from its project pipeline.e600,000 represents the estimated fair value of the obligation.

With respect to the share issued and the contingent equity consideration, the new shareholders have entered into an orderly marketarrangement in relation to the ordinary shares which they have or will acquire for a period of twelve months from the date of issue.

Assets Acquired and Liabilities Recognised at the Date of Acquisition

Reforce Enfield Totale e e

Non-Current AssetsProperty, plant and equipment - 702,256 702,256Development Costs 114,343 - 114,343Current AssetsAmounts due to customersunder construction contracts 162,075 - 162,075Trade and other receivables 10,152 1,176,538 1,186,690Cash and cash equivalents 156,647 134 156,781Current LiabilitiesTrade and other payables (149,334) (1,745,093) (1,894,427)Non-Current LiabilitiesBorrowings (105,000) (900,000) (1,095,000)

188,883 (856,165) (667,282)

Goodwill Arising on Acquisition (Note 18)Consideration transferred 2,000,000 10,000 2,010,000Add: fair value of previously held equity interests - (428,082) (428,082)Less: fair value of identifiable net (assets) / liabilities acquired (188,883) 856,165 667,282

1,811,117 438,083 2,249,200

The contingent equity consideration requires the Group to make a further issue of 59,737,418 ordinary shares in Kedco plc to theformer shareholders of Reforce when Reforce obtains eight planning permissions for renewable energy projects from its projectpipeline. e600,000 represents the estimated fair value of the obligation.

With respect to the share issued and the contingent equity consideration, the new shareholders have entered into an orderly marketarrangement in relation to the ordinary shares which they have or will acquire for a period of twelve months from the date of issue.

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Business Combinations (Continued)

Goodwill arose in the acquisition of Reforce because the purchase included the project pipeline and customer relationships of ReforceEnergy Limited as part of the acquisition. These assets could not be separately recognised from goodwill because they are not capableof being separated from the Group and sold, transferred, licenced, rented or exchanged, either individually or together with any relatedcontracts. None of the goodwill arising on acquisition is expected to be deductible for tax purposes.

Goodwill arose in the acquisition of Enfield because the purchase included the future potential arising from the 12MW Enfield projectas part of the acquisition. These assets could not be separately recognised from goodwill because they are not capable of beingseparated from the Group and sold, transferred, licenced, rented or exchanged, either individually or together with any related contracts.None of the goodwill arising on acquisition is expected to be deductible for tax purposes.

Net Cash Inflow on Acquisition of Subsidiaries 2013 e

Consideration paid in cash -Cash and cash equivalent acquired 156,781

Net cash inflow on acquisition of subsidiaries 156,781

Impact of acquisitions on the results of the Group

Included in the loss for the year is a gain of e3,013 related to Enfield and a loss of e111,827 relating to Reforce. Revenue for the periodincludes eNil in respect of Reforce and Enfield.

Had the acquisition of Reforce been effected at 1st July 2012, the revenue of the group from continuing operations for the year ended30th June 2013 would not have changed; and the loss for the period from continuing operations of the group would have beenincreased by e115,896.

Had the acquisition of Enfield been effected at 1st July 2012, the revenue of the group from continuing operations for the year ended30th June 2013 would not have changed, and the loss for the period from continuing operations of the group would have beenincreased by e8,774. Enfield was accounted for as a jointly controlled entity up to 27th November 2012; therefore the results for theyear include the Group’s share of the profits of Enfield up to that date, totalling e83.

The directors of the Group consider these pro-forma numbers to represent an approximate measure of the performance of the combinedgroup on an annualised basis and to provide a reference point for comparison in future periods.

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Disposal of Subsidiaries

On 27th November 2012, the group disposed of Kedco Block Limited, a holding company registered in England and Wales; and SIAVudlande, a company registered in Latvia and a 80% subsidiary of Kedco Block Limited, which carried out all of its Wood Productsoperations, being the production of sawn timber, realisation of wood and the supply of wood chips.

Consideration receivedTOTAL

e

Part settlement of Zero-Coupon Loan Notes (See Note 29) 3,000,000

Total consideration received 3,000,000

Analysis of assets and liabilities over which control was lost

Non-Current AssetsProperty, plant and equipment 3,662,026

Current AssetsInventories 1,152,532Trade and other receivables 1,303,194Cash and cash equivalents 213,075

Current LiabilitiesTrade and other payables (428,299)Borrowings (659,969)Deferred income (10,302)

Non-Current LiabilitiesBorrowings (712,487)Finance lease liabilities (220,773)Deferred income (21,463)Deferred tax liabilities (337,793)

Net assets disposed of 3,939,741

Loss on disposal of subsidiaryConsideration received 3,000,000Net assets disposed of (3,939,741)Non-controlling interests 930,875

Loss on disposal (8,866)

The loss on disposal is included in the profit for the year on discontinued operations (Note 15).

Net Cash Inflow on Disposal of Subsidiaries 2013

Consideration received in cash -Cash and cash equivalents disposed of (net liability) 226,094

Net cash inflow on disposal of subsidiaries 226,094

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Contingent Liabilities

In the normal course of business, the Group has contingent liabilities arising from various legal proceedings with third parties, theoutcome of which is uncertain. Provision for a liability is made when the directors believes that it is probable that an outflow of fundswill be required to settle the obligation where it arises from an event prior to the year end. It is the policy of the Group to rigorouslydefend all legal actions taken against the Group.

During the year ended 30th June 2012, Newry Biomass Limited, a jointly controlled entity of the Group, entered into a binding facilitiesagreement with Ulster Bank Group. Pursuant to this agreement, Ulster Bank will advance up to £9.44m to enable the completion ofconstruction, installation and commissioning of a 4MW biomass electricity and heat generating plant in Newry, Northern Ireland. Aspart of this agreement, Kedco plc has:

�

�

�

Details of other guarantees are disclosed in Note 29.

As disclosed in Note 35, and as part of the restructuring carried out by the Group, Wellwin Investments Limited have been guaranteeda development fee of e255,000 upon financial close of project finance for the project known as the Enfield Biomass project.

Commitments

At the balance sheet date, the group has commitments of e1,047,500 (2012: € Nil) with respect to the purchase of equipment inrelation to the construction of a wind farm by one of its subsidiaries, Pluckanes Windfarm Limited. The cost of this commitment is tobe met by the senior term loans obtained from Allied Irish Banks plc as disclosed in Note 42 below.

Events After the Balance Sheet Date

On 20th August 2013, the Group announced that it has entered into a rolling, monthly working capital facility with Farmer BusinessDevelopments plc (‘FBD’), who holds 26.79% of the ordinary share capital of the company. The facility, which has no maturity dateand is repayable on demand, is unsecured and any drawdowns will accrue interest at a rate of 5% per annum. The facility is cappedat e500,000 but may be increased by agreement between the parties. As at 27th November 2013, the full facility has been drawndown.

On 20th August 2013, the Group announced that its wholly owned subsidiary, Reforce Energy Limited, had raised e215,000 in loannotes from private investors. The proceeds from the loan notes will be used to fund development costs and equity related to singlewind turbine projects.

On 20th August 2013, the Group announced that its wholly owned subsidiary, Pluckanes Windfarm Limited, had reached financial closewith Allied Irish Banks plc for the funding of the 800kW Pluckanes Windfarm project, totalling e1.15m in senior term loans.

On 20th August 2013, the Group announced that its jointly controlled entity, Newry Biomass Limited, secured working capital and otherfacilities from Ulster Bank Ireland Limited totalling £750,000. This is to be used to fund the working capital needs and the continuedbuild out of biomass project located in Newry, Co. Down.

Classification of Comparative Amounts

Accrued preference share dividends had previously been accounted for as part of accruals in Trade and Other Payables. The directorshave reviewed this and feel that it is better to present this as part of the related borrowings. The comparative amounts have beenreclassified accordingly. The effect on the comparative amounts had been to decrease trade and other payables by e100,000 and toincrease borrowings included in non-current liabilities by e100,000.

Assigned all relevant licences and permits held by the Group with respect to the Newry project; Provided a guarantee guaranteeing the obligations of Kedco Fabrication Limited with respect to the construction, installation andcommissioning of the plant; andAs a joint venture partner, has jointly and severally guaranteed the obligations of Newry Biomass Limited.

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Company Profit and Loss

In accordance with Section 148(8) of the Companies Act, 1963 and Section 7(1A) of the Companies (Amendment) Act, 1986, theCompany is availing of the exemption from presenting its individual profit and loss account to the Annual General Meeting and fromfiling it with the Registrar of Companies. The Company’s loss for the financial year was e26,451,128 (2012: e285,358).

Approval of Financial Statements

These consolidated financial statements were approved by the Board of Directors on 28th November 2013.

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Advisors and Other Information -

� DIRECTORS:

Dermot O’Connell, Non-Executive Chairman

Gerry Madden, Chief Executive Officer

Brendan Halpin, Executive Director

Steve Dalton, Executive Director

Edward Barrett, Non-Executive Director

� SECRETARY:

Brendan Halpin

� NOMINATED ADVISER:

Shore Capital & Corporate Limited, Bond Street House, 14 Clifford Street, London W1S 4JU, United Kingdom

� AUDITORS:

Deloitte & Touche, No 6 Lapps Quay, Cork, Ireland.

� BANKERS:

Allied Irish Bank, Main Street, Carrigaline, Co. Cork, Ireland.

Ulster Bank, George’s Quay, Dublin 2, Ireland.

� SOLICITORS:

Brown Rudnick, 8 Clifford Street, London, W15 2LQ, United Kingdom.

� BROKER:

Shore Capital Stockbrokers Limited, Bond Street House, 14 Clifford Street, London W1S 4JU, United Kingdom

� REGISTRAR:

Capita Corporate Registrars plc, 2 Grand Canal Square, Dublin 2, Ireland.

� REGISTERED OFFICE:

Kedco plc, 4600 Airport Business Park, Kinsale Road, Cork, Ireland.


4600 Cork Airport Business Park

Kinsale Road

Cork

Ireland

t +353 (0)21 483 9104

f +353 (0)21 483 9112

e [email protected]

w www.kedco.com design: C

harli

e Nev

ille, Cork

Kedco plc

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